Delays in establishing public registers and accessibility barriers undermine EU’s progress in ending kleptocratic abuse of anonymous companies.
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To counter crime and corruption, law enforcement authorities around the world need to be able to swiftly uncover the identities of the real owners of companies. For instance, if there are suspicions that a bank account belonging to a company is being used to handle the proceeds of crime, authorities should have the power to quickly find out who the person behind that company is.
In the last five years, several major investigations have demonstrated how easy it is to set up and manage a legal entity without having to provide information about its beneficial owner – the real, natural person who ultimately owns and controls it and on whose behalf transactions are conducted.
The challenge this poses to authorities is exacerbated when there is a transnational element: companies are often set up in one country, with the support of professionals in another. Assets and bank accounts, meanwhile, may be in a third country with the real person calling the shots in yet another. The end result is that even when the authorities have identified a company as a vehicle for laundering illicit finances, the person in control remains a mystery. Crucially, this structural weakness is not limited to offshore jurisdictions alone. Transparency International argues that public registers of beneficial ownership should be the norm.