In 2021, Transparency International Germany uncovered troubling discrepancies in the beneficial ownership information related to the Mecklenburg-Western Pomerania Climate and Environmental Protection Foundation in Germany. Despite clear evidence, the Foundation continued to conceal its ties to Gazprom, the Russian state-owned gas giant, in its registration with Germany's Transparenzregister (beneficial ownership register). This case highlights issues of corporate transparency, legal compliance, and state-level corruption, ultimately underscoring the critical need for stronger verification mechanisms in beneficial ownership registers globally.

The Foundation’s creation and its ties to Gazprom

The Mecklenburg-Western Pomerania Climate and Environmental Protection Foundation, established in January 2021 by the state government, was created to focus on climate and environmental protection. However, its significant financial and operational ties with Gazprom through Nord Stream 2 AG, which is responsible for constructing a controversial gas pipeline, have raised ethical and legal concerns. Funded with over US$ 300,000 from taxpayer money and an additional US$ 24 million from Nord Stream 2 AG, the Foundation's mission has been questioned due to Gazprom's influence, as the company's involvement allows it to appoint management, giving it substantial control over the Foundation’s activities and funds.

Failure to disclose beneficial ownership

Under Germany’s Anti-Money Laundering (AML) regulations, entities listed in the Transparenzregister are required to disclose information on those who have significant control over them—particularly when a state-owned company is involved. In the case of the Foundation, Transparency International discovered that key figures like Gazprom CEO Alexey Miller and the Russian Federation were not listed as the ultimate beneficial owners in the Foundation’s public registry entry.

Despite repeated reports in March and December 2021 from Transparency International pointing out these omissions, neither the state government nor the Foundation took corrective action. This concealment raised serious concerns about potential violations of EU regulations, as the Foundation's operations directly conflicted with the international sanctions’ regime designed to prevent state-owned Russian companies from leveraging EU institutions to circumvent financial controls.

The corruption at play

The failure to disclose the true ownership and control of the Mecklenburg-Western Pomerania Climate and Environmental Protection Foundation constitutes "corruption by omission," as the state government and the Foundation deliberately concealed its ties to Gazprom, potentially facilitating sanctions evasion and undue influence on financial and operational decisions. This opacity allowed Gazprom, through Nord Stream 2 AG, to use the Foundation to further its geopolitical and economic interests, including the controversial Nord Stream 2 pipeline. Gazprom funnelled millions of euros through the Foundation under the guise of environmental protection, which were then used to shield pipeline construction from U.S. sanctions and fund pro-pipeline lobbying efforts. Additionally, this concealment breaches Germany’s and the EU's Anti-Money Laundering Directives, highlighting a systemic issue with the lack of independent verification of ownership information.

Broader implications and the need for reform

This case underscores the global need for stronger verification processes in beneficial ownership registers, with the Financial Action Task Force (FATF) and the European Commission advocating for independent verification to prevent fraud and ensure transparency. The failure to implement such measures poses serious risks, enabling organizations to engage in illicit activities like money laundering or sanctions evasion, as seen here, where deceptive ownership structures could have facilitated a Russian state-owned enterprise in circumventing international sanctions.

Latest developments

As of March 2025, there have been no significant updates from the Mecklenburg-Western Pomerania state government or the Foundation regarding the correction of ownership information. However, international scrutiny over Russia's actions in Ukraine has intensified, prompting calls for greater transparency in connections between state-owned Russian companies and European entities. This has fuelled ongoing calls for reform by the European Commission and the FATF, with hopes that future regulations will prevent similar cases.