Arab Press

بالشعب و للشعب
Thursday, Mar 28, 2024

Beneficial Owner Not Found: Are EU Public Registers in Place and Really Public?

Beneficial Owner Not Found: Are EU Public Registers in Place and Really Public?

Delays in establishing public registers and accessibility barriers undermine EU’s progress in ending kleptocratic abuse of anonymous companies.

That anonymous shell companies are the vehicle of choice for the corrupt and criminals is no longer a secret. New cases of cross-border corruption and money laundering are reported almost on a weekly basis, where perpetrators often hide behind secretive corporate structures.

The European Union has been lauded for its progress in curbing the abuse of anonymous companies, and rightly so. The bloc was among the first to take serious steps aimed at improving beneficial ownership transparency.

Most notably, in 2015, the 4th EU Anti-Money Laundering Directive (AMLD) required countries to establish beneficial ownership registers. In 2018, in response to scandals such as the Panama Papers and Paradise Papers, the EU approved the 5th EU AMLD, which contained further measures for enhancing the ability of competent authorities – both inside and outside the EU – to detect and investigate money laundering and financial crime.

The 5th EU AMLD, however, does more than that. Recognising that transparency can be a powerful deterrent, it also sets measures for preventing money laundering and financial crimes. What is more, acknowledging the importance of public scrutiny of company and beneficial ownership data to preserving trust in the integrity of business transactions and of the financial system, it requires countries to open up their beneficial ownership registers to all members of the public.

Who complied, and who didn’t?


Three years after the directive’s adoption and more than a year after the deadline for transposing key measures at the national level, Transparency International has taken stock of whether countries across the EU have implemented measures to improve transparency in company ownership.

The great majority of countries across the Union – 24 out of 27 – have at least a private central beneficial ownership information register in place. The only three countries that have not yet established any type of beneficial ownership registers are Hungary, Italy and Lithuania.

Non-compliance with EU rules becomes much greater, however, if we look at whether EU countries have established public beneficial ownership registers. Six countries – Cyprus, Czech Republic, Finland, Greece, Romania and Spain – have failed to comply with the deadline and have not yet opened up their registers to the public. In most of these countries, access to the data can still be granted to the media or civil society, if they prove they have a legitimate interest.

Beneficial ownership registers across the EU

Accessible – but not really


Despite EU provisions that stress the importance of granting access to beneficial ownership information to both domestic and foreign competent authorities, as well as members of the public, what we find is that access may be restricted – even in countries that have public central registers in place.

Several countries have set up complex registration systems that often require a digital identification document – from that country or another EU country on its list of countries with an approved electronic identification system. In reality, these registration requirements are creating geographic access restrictions, in clear breach of EU rules, limiting the ability of foreign authorities as well as the public to seek and receive information on real company ownership.

For example, in Belgium, access to the register is limited only to Belgian citizens or foreign citizens who possess a Belgian tax identification number.

Access to the information can be restricted by the functionalities of the register and how information can be searched.

Other restrictions include, for example, requiring the exact spelling of the name of the company as entered in the register like in Sweden, the company’s tax identification number in Poland or the beneficial owner’s personal identification number in Malta, Poland and also in Sweden. In Bulgaria, it is possible to search by company and beneficial owner by only in Cyrilic.

Only in Denmark and Latvia the information in the register is available as structured data and in a machine-readable format, allowing the public to download the whole dataset.

No more delays & restrictions


All in all, more than a year after the EU AMLD transposition deadline, nine EU countries still do not have public beneficial ownership registers in place. Others impose geographic access restrictions, in clear breach of EU rules. Most EU countries have introduced barriers such as paywalls and which, although legal, restricts access and usability of the data.

It is imperative that governments of Cyprus, the Czech Republic, Finland, Greece, Hungary, Italy, Lithuania, Romania and Spain fully implement the 5th EU AMLD and establish public beneficial ownership registers without any further delay.

Next, all EU member states should ensure that the spirit of the EU directive has been respected. The first step to ensure the quality of the register is to collect and make available all key information to identify a beneficial owner and understand their relationship with the legal entity. This information should then be easily accessible. The easier it is for users to search on the register, analyse connections and cross-check the data with other relevant information, the more likely it is that authorities and other actors can identify red flags and potential wrongdoing.

The European Commission itself has a significant opportunity to address these glaring shortcomings in the member states’ transposition of the directive. As part of the forthcoming anti-money laundering rulebook, the Commission should propose a set of guidelines to improve the availability of beneficial ownership data as well as to facilitate the interconnectivity of registers across the EU.

Unless these issues are addressed across the board, authorities and independent actors in the EU and beyond will continue facing difficulties in identifying the real individuals behind the companies that are used and abused to commit financial crimes – which means there’s no stopping the flows of dirty money in the EU.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
PM Modi Announces Opening Of New CBSE Office In Dubai
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Facebook and Instagram Ban Iran's Supreme Leader
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
The Saudi Kingdom's Ultimatum to Israel: A Win-Win Peace with Saudi Arabia and the Arab World, or a Lose-Lose Continued Occupation and Endless Conflict
Biden condemns anti-Arab hate after WSJ opinion piece calls Dearborn ‘jihad capital’
Turkey Releases Seven Hostages Captured by Pro-Gaza Gunman
Arab Parliament Commends Women's Contributions to Societal Development
British and Hungarian Foreign Ministers visited Lebanese leaders to stress the importance of enacting UN Resolution 1701
Yemen's Houthis Say They Targeted British Merchant Vessel In Red Sea
Donald Trump Nominated for Nobel Peace Prize for 'Historic' Middle East Policy
US lawmakers approve F-16 jet sale to Turkey following NATO expansion support
Saudi Arabia Climbs 25 Places in World Bank's National Statistics Indicator
Tourism Growth in Saudi Arabia Fuels Advancements in the Hospitality Industry," Says Rotana Official
Houthi Rebels Request Departure of UN Staff from Yemen, Including US and UK Personnel, within a Month
Modi Inaugurates Hindu Temple on Site of Demolished Mosque in India
Over 25,000 Deaths in Gaza Amid Israeli Offensive
Escalating Clashes in Gaza as Israel Distributes Leaflets to Assist in Locating Hostages
Turkey's First Astronaut Set to Launch for International Space Station Today
Head of Palestinian Investment Fund Warns More People May Die of Hunger Than War in Gaza
Palestinian Envoy Criticizes UK for Alleged 'Double Standards' in Policies Toward Israel
Morocco to Lead UN Human Rights Council in 2024
Is artificial intelligence the solution to cyber security threats?
Egypt has been identified as the leading military force among Arab nations and ranks 15th globally
The AI Revolution in the Workforce: CEOs at Davos Predict Major Job Cuts in 2024
Iranian Nobel Laureate Narges Mohammadi Receives Additional Prison Sentence
"Gazans Urge Israeli Forces to Target Hamas in Leaked Audio"
Biden States US and UK Airstrikes on Houthis Were a 'Defensive Action
Large Pro-Palestine Rally in London as Gaza Conflict Hits Day 100
South Africa Urges World Court to Halt Israeli Actions in Gaza
×