Major corruption scandals hitting the news often share key commonalities: the people at the centre of the scandal use a complex web of anonymous companies, trusts and other legal entities situated across multiple jurisdictions to transfer and hide their illicitly sourced funds. Perpetrators often use the services of professional middle-men and banks to move or conceal money and the funds often end up in the hands of other professionals, such as real estate agents or luxury goods providers, making the proceeds of corruption appear legitimate.
In recent years commitments have been made at the highest level to tackle the misuse of these corporate vehicles and trusts, and to increase transparency around who ultimately owns, controls or is benefitting from them. At their Brisbane Summit in November 2014, the Group of 20 (G20) leaders adopted High-Level Principles on Beneficial Ownership Transparency, describing financial transparency as a “high priority” issue. The G20 principles build upon the Financial Action Task Force (FATF) recommendations, which set the current global standards for anti-money laundering. The FATF recommendations were strengthened in 2012, which means that some countries may still be in the process of strengthening their own frameworks accordingly.
It is crucial that the G20 principles are now transposed into law and implemented effectively by member countries. In July 2015 Transparency International published a Technical Guide13 that outlines in detail how governments can ensure their legal framework is in line with each of the 10 G20 principles to more effectively tackle money laundering. The current report, Just for Show? Reviewing G20 Promises on Beneficial Ownership now assesses the extent to which G20 members are fulfilling their legal and regulatory commitments implicit in the G20 principles one year after their adoption. This baseline analysis identifies areas of strength and weakness in the current beneficial ownership transparency framework of each G20 member country so that progress can be monitored in the years to come. It draws on data collected from expert questionnaires focusing on the key components of each G20 principle.
This report aims to encourage a conversation in each country on where laws can be improved to strengthen the beneficial ownership regulatory framework. Alongside this report we also publish individual summaries for each G20 member, which provide more detailed analysis on an individual basis. The combined findings should be used to help identify which concrete legal provisions should be adopted in order to adhere to the commitments within the G20 principles. Where they exist, Transparency International encourages competent authorities, such as tax and banking regulators, as well as law enforcement agencies, to ensure the strong legal basis is effectively enforced within these countries to close the tap on illicit financial flows to and from their jurisdiction.