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Mystery companies and money laundering

The week in corruption

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Transparency Int'l

This week, Maltese police appear to be on the verge of a breakthrough in the case of the murder of Daphne Caruana Galizia. Businessman Yorgen Fenech was arrested on Wednesday, and while he has now been released on bail, questions remain — especially about the role of secret company 17 Black which he reportedly owns. No matter where the answers might lead, there must be an independent and impartial investigation into this tragic murder, to bring those behind it to justice.

Daphne Caruana Galizia had alleged that 17 Black had ties to the Maltese government. Later investigations not only indicated that the company was owned by Fenech, but also that it might have paid millions to secret Panamanian companies. These, in turn, are reportedly connected to high level officials in the Maltese government.

Confused yet? Opaque company ownership structures are often made to be confusing. Though not always created with criminal intent, they are frequently used to cover up crimes and launder assets.

To prevent this, banks must enforce anti-money laundering rules. But they are often failing: a leaked report from the European Central Bank shows that Malta’s biggest bank was likely turning a blind eye to money-laundering risks, partly related to the country’s golden visa scheme — another issue Daphne was reporting on.

The devastating impacts of weak anti-corruption measures are not limited to certain jurisdictions. Just this week, we have seen banks in Australia, Sweden, Austria and the United Kingdom caught up in global money-laundering cases, showing why states shouldn’t leave fighting corruption to them.

Authorities need to be able to uncover the identities of the real owners of companies. Only by ending secrecy can those responsible for corruption and murder be held accountable.

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This blog is part of our weekly series of updates on everything corruption-related. You can get them straight to your inbox every Friday.

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