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Reliance on information from banks hindering corruption and money laundering investigations

18/10/2019

Transparency International - WHO IS BEHIND THE WHEEL? FIXING THE GLOBAL STANDARDS ON COMPANY OWNERSHIP

Transparency International has issued a report dealing with the following matters

In countering crime and corruption, law enforcement authorities around the world need to be able to uncover the identities of the real owners of companies swiftly.

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 find out quickly who the person behind that company

In the last five years, several significant 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, maybe in a third country with the real person calling the shots in yet another.

The 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.

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