Transparency International called on Finance Ministers and Central Bank Governors from the Group of Seven leading economies (G7) meeting in London this week to create greater transparency across the financial sector and put an end to a system that allows the corrupt to hide behind secret bank accounts.
UK Prime Minister David Cameron has taken the lead in pushing for greater cross-border sharing of financial information, noting that the current state of affairs damages individuals, societies and economic development. This is an important step but must be accompanied by action to force hidden corporate structures into the light.
“Too many people have been able to hide behind a secret bank account far beyond the reach of justice. The world is expecting G7 countries to do more to finally increase financial stability, restore trust and prevent money laundering,” said Transparency International Chair Huguette Labelle. “Transparency can shed light on the illicit flows that too often sidestep investigators.”
Transparency International called on Ministers of Finance from G7 countries to eliminate secrecy surrounding the beneficial ownership of companies and trusts. Governments must make existing company registers accessible to regulators, financial institutions, and the public. Today, information on beneficial ownership is provided by only 4 EU Member State business registers (Estonia, Italy, Romania & Slovenia).
Corporate structures and financial mechanisms in ‘secrecy jurisdictions’ disguise the proceeds of corruption and organised crime. Finding out who ultimately profits from these mechanisms - the question of beneficial ownership - is central to efforts to close down this avenue for ill-gotten gain.
G7 governments can build further momentum by encouraging more countries to join the Global Forum on Transparency and Exchange of Information and the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and support the automatic exchange of financial information. 10 EU countries have taken such steps in recent weeks, but implementation is key.
G8 Heads of State will meet in Northern Ireland on June 17-18 2013 under pressure from civil society to tackle opacity across the global banking system to help prevent another devastating financial and economic crisis.
Transparency International is the global civil society organisation leading the fight against corruption
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