A few months ago, we learned how the rich and powerful of the world were relocating their wealth to Luxembourg, a small country in the heart of Europe. In addition, individuals suspected of corruption or under investigation for various crimes in their country of origin could have been hiding behind Luxembourg companies when they bought real estate and did business elsewhere.
These surveys – known as OpenLux – are also noteworthy for another reason. Unlike other major revelations which relied on document leaks – often at great risk to whistleblowers – the OpenLux reports were based on analysis of public documents. Journalists and civil society were able to access information on the beneficial owners of Luxembourg companies – natural persons who ultimately own, control or benefit from these companies – in a government register.
In 2018, the European Union (EU) adopted an anti-money laundering directive, which obliges its member states to establish publicly accessible registers of beneficial owners. Luxembourg was one of the first countries to follow up, making its register public the following year.
Prior to that, in 2016, the United Kingdom (UK) became the first country in the world to set up a public register of beneficial owners of companies.
Even though they have not been in place for more than a few years, it is increasingly clear that public beneficial ownership registers are important tools in advancing the fight against corruption, tax evasion and tax evasion. ‘other financial crimes. This is true even when their access is effectively limited as they do not allow users, for example, to search by name of persons or to download data – as is the case in Luxembourg.
This fall, the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog, will review the global standard on beneficial ownership transparency. Transparency International has already requested several key fixes, and public registries are at the top of our list.