Global civil society organisations concerned about CJEU ruling on beneficial ownership transparency
As European Union and African Union representatives meet on Monday 28 November 2022 to review progress following the EU-AU Summit in February, 32 African and European civil society organisations have raised concerns about threats to ground-breaking EU transparency measures, which could threaten all that has been put in place to prevent and combat the problem of illicit financial flows out of Africa.
The Center for Fiscal Transparency and Integrity Watch organisations state:
“Illicit financial flows rob African nations of almost US$89 billion each year. Anonymous companies are often used as the get-away vehicles of the corrupt, helping syphon these funds out of Africa – often to Europe – denying countries revenues that could be used to boost economies, and fund health and education systems.
“The EU has been a trailblazer in cracking down on the use of these phantom firms. The requirement under the 2018 Anti-Money Laundering Directive for EU countries to set up and make public registers of beneficial owners of companies was a major step forward, helping shine a light on this murky world. A 22 November 2022 ruling by the European Court of Justice invalidating these rules and so denying public access to beneficial ownership information is therefore extremely concerning.
"Given the EU’s position as a global leader on beneficial ownership transparency, we fear that the ruling risks could have a chilling effect on other countries that are deliberating whether or not to open up their registers, or are currently legislating for public registers. The ruling will also have a direct impact on the ability of civil society, investigative journalists and even competent authorities in other parts of the world to access EU company ownership information, something which is critical to identifying and recovering stolen assets.
“Company ownership transparency is not only a tool for rooting out corruption. It is also fundamental for building confidence in our business environments and critical for establishing public trust and accountability in the rules that govern us – both essential ingredients for the functioning of democracy. Open registers also contribute to combatting tax evasion efforts and improving integrity in public procurement. They are important also in tackling natural resource crimes and improving governance in extractive industries. It is precisely on these bases that civil society has successfully campaigned for public registers in Nigeria, Ghana, Zambia, Liberia and Kenya, among others.
“We therefore urge the European Commission to make a clear choice of openness over secrecy and quickly set out how they intend to ensure beneficial ownership registers across the bloc are accessible to the public again as soon as possible.”
Notes to editors:
On 22 November 2022, The Court of Justice of the European Union declared invalid the provision of the Fifth European Union Anti-Money Laundering Directive that requires EU countries to provide public access to beneficial ownership registers. Press release (PDF)
African and European leaders met in Brussels in February 2022 for the AU-EU Summit and highlighted in the joint declaration their commitment to cooperating to combat illicit financial flows
UNCTAD estimates that each year an estimated US$88.6 billion leaves the African continent as illicit financial flows - the equivalent of 3.7% of Africa’s GDP
- Access Info Europe
- Africa Freedom of Information Centre (AFIC)
- BudgIT Foundation
- Center for Fiscal Transparency and Integrity Watch (Nigeria)
- Center for Media studies and Peacebuilding (CEMESP) Liberia
- Financial Transparency Coalition
- Ghana Anti-Corruption Coalition (GACC)
- Ghana Integrity Initiative (TI - Ghana)
- Government Transparency Institute
- Institute for Public Finance
- Kick Corruption out of Uganda (KICK-U)
- Media Foundation for West Africa
- Media Institute of Southern Africa (MISA)
- Media Rights Agenda (MRA)
- Open Ownership
- Open Spending EU Coalition
- Open State Foundation
- Panos Institute Southern Africa
- Public and Private Development Center (PPDC)
- Rencontre pour la Paix et les Droits de l’Homme (RPDH)
- The ONE Campaign
- Transparency International - Initiative Madagascar
- Transparency International EU
- Transparency International Kenya
- Transparency International Sierra Leone
- Transparency International Uganda
- Transparency International Zambia
- Transparency International
- Transparency Mauritius