Transparency International report shows G20 countries fail to keep their promises on fighting crime

Issued by Transparency International Secretariat



G20 governments including the US and China have failed to deliver on their promise to fight corruption by adopting laws to end the secrecy that makes it easy for the corrupt to hide their identity and shift money across international borders.

As much as $2 trillion is laundered each year, much of it by hiding company ownership, yet only the United Kingdom in the G20 is actively working to make it harder for the corrupt to hide their cash, according to a new report from Transparency International.

The world’s biggest economies, the United States and China, are among the worst performers, falling into the “Weak Framework“ category. Both must intensify efforts to put the laws in place to stop the misuse of companies and other legal entities for corrupt purposes.

“Pick any major corruption scandal in recent history – Petrobras, FIFA, Ukraine’s Viktor Yanukovych – and you will find a secret company was used to pay a bribe, shift and hide stolen money, or buy luxury real estate in places like London and New York.

“It makes no sense that this gaping loophole for the corrupt remains open. What is stopping G20 countries from actively shutting down this vital avenue to corruption, despite promises to do so?” asked Transparency International Managing Director Cobus de Swardt.

It is now one year since G20 governments made the bold commitment (the G20 Beneficial Ownership Transparency Principles) in Brisbane to dismantle the legal structure that allows anonymous companies, trusts and other legal entities operating in the world’s 20 biggest economies to transfer and hide money often stolen through corruption.

Some countries have fallen behind on the most basic aspects of ensuring we know who is really behind companies, trusts and other entities. Brazil and South Africa have not even adopted a legal definition of beneficial ownership, the technical term used to describe the real person or persons ultimately in control.

G20 governments also need to tighten up their oversight on companies, banks and the people who help the corrupt to enjoy lavish lifestyles at the expense of their own citizens. Only two countries, India and the UK, require companies to record and keep up to date information about the real person who owns or controls them. That means in the rest of the G20 if a company does something illegal it may not be possible to hold the actual owner accountable.

Even more disturbing, in eight G20 countries that include the financial centres of New York, Tokyo, Shanghai and Sydney, even if banks can’t find out the identity of the real person behind the money, they can still go ahead and finish the transaction.

In seven G20 countries real estate agents don’t need to identify the real people who are behind the sales and purchases of property. As a result hundreds of billions of dollars of property in London and New York have secret owners. It is incredibly difficult to stop a corrupt politician from buying a luxury mansion with money stolen from public coffers if he uses simple measures to hide his connection to the funds.

Even though the UK is top-ranked in the survey its score under this assessment only covers domestic law and not the beneficial ownership standards for legal entities and trusts incorporated in the British Overseas Territories and Crown Dependencies. The weaker performance in many of the British Overseas Territories and Crown Dependencies on key beneficial ownership issues threatens to undermine the UK’s implementation to the G20 principles as a whole.  

"Governments need to supply the tools to make it easier for banks, accountants, lawyers and other businesses to stop corrupt customers. This means creating a central, public register containing beneficial ownership information, it’s that simple.

“The world looks to the G20 for leadership on political, economic and other important issues of the day. To avoid looking little more than a talk shop, they must keep their promises – including on tackling corruption,” said Cobus de Swardt.

Click here to see the full report: http://www.transparency.org/whatwedo/publication/just_for_show_g20_promises 

###

Transparency International is the global civil society organisation leading the fight against corruption.

Background Materials

 


For any press enquiries please contact

Chris Sanders
E. .(JavaScript must be enabled to view this email address)
T. +49 30 343820 666

Latest

Support Transparency International

Support Us

Legally sanctioned lying: A moment of truth for the Czech Republic?

A court in Prague struck a blow to civil society in the Czech Republic on Friday, ruling in favour of Prime Minister Andrej Babiš in a libel suit brought by TI Czech Republic.

Next week governments can take a step to close down secrecy jurisdictions. Will they?

National financial regulators attending the Financial Action Task Force (FATF) plenary in Paris 16 – 21 February have the opportunity to significantly reduce money laundering, corruption and terror financing. They must not squander the opportunity.

Why don’t the victims of bribery share in the record-breaking Airbus settlement?

Last Friday, French, UK and US authorities announced that Airbus would pay record penalties for foreign bribery. Notably absent in the agreements are any plans to share the penalty payment with the countries where the company was paying bribes.

Nadie es perfecto

Los países con las puntuaciones más altas en el IPC, como Dinamarca, Suiza e Islandia, no son inmunes a la corrupción. Si bien el IPC muestra que los sectores públicos en estos países están entre los menos corruptos del mundo, la corrupción existe, especialmente en casos de lavado de dinero y otras formas de corrupción en el sector privado.

مشكلة في الأعلى

Переполох на верху

Страны с самым высоким рейтингом по ИВК, такие как Дания, Швейцария и Исландия, не защищены от коррупции. Хотя ИВК показывает, что государственный сектор в этих странах является одним из самых чистых в мире, коррупция все еще существует, особенно в случаях отмывания денег и другой коррупции в частном секторе.

Problèmes au sommet

Les pays les mieux classés sur l’IPC comme le Danemark, la Suisse et l’Islande ne sont pas à l’abri de la corruption. Bien que l’IPC montre que les secteurs publics de ces pays sont parmi les moins corrompus au monde, la corruption existe toujours, en particulier dans les cas de blanchiment d’argent et d’autres formes de corruption du secteur privé.

Social Media

Follow us on Social Media