Our investigation with the Anti-Corruption Data Collective has found investment funds in Luxembourg largely operate in an opaque manner.
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Almost on a weekly basis, journalists uncover – often thanks to whistleblowers – new cases of kleptocratic abuse of anonymous companies. And because they cannot identify the real individuals behind the companies that are used and abused to commit financial crime, law enforcement agencies and other competent authorities around the world have been facing significant challenges in investigating and countering cross-border corruption, money laundering, environmental crimes and even human trafficking.
The European Union (EU) was among the first to take serious steps aimed at improving transparency in company ownership. Most notably, in 2015, the 4th EU Anti-Money Laundering Directive (AMLD) required countries to establish beneficial ownership registers. In 2018, in response to scandals such as the Panama Papers and Paradise Papers, the EU approved the 5th EU AMLD, which contained further measures for enhancing the ability of competent authorities – both inside and outside the EU – to detect and investigate money laundering and financial crime.
The 5th EU AMLD, however, does more than that. Recognising that transparency can be a powerful deterrent, it also sets measures for preventing money laundering and financial crimes. What is more, by recognising the importance of public scrutiny of company and beneficial ownership data to preserving trust in the integrity of business transactions and of the financial system, it requires countries to open up their beneficial ownership registers to all members of the public.
Three years after its adoption and more than a year after the deadline for transposing key measures at the national level, Transparency International is taking stock of whether countries across the EU have implemented measures to improve transparency in company ownership. We have assessed, in particular, whether the spirit of the law has been respected. Above all, we analysed the accessibility of public beneficial ownership registers across Member States.