This is a post by Ruba Ishak and Nick Goetschalckx, from ONE’s Transparency and Accountability team.
Exotic fauna and flora, crystalline waters and sandy beaches – while the European Union Institutions are on holiday, we can’t stop thinking about Panama. The Panama Papers to be specific.
Pakistani Prime Minister Nawaz Sharif was recently removed from office following corruption allegations that began after the Papana Papers revealed a complex web of anonymously owned British Virgin Island companies, and a trail of secret bank accounts and anonymous companies in Cyprus linked President Donald Trump’s former campaign manager to pro-Russian interests.
These are just a few of the most recent scandals involving anonymous companies and trusts (we wrote about some others in March). Anonymous companies and trusts play a central role in money laundering, hiding the identity of corrupt individuals and businesses involved in trafficking of arms, drugs and people, the theft of public funds and tax evasion. Every year a trillion dollars – that’s $1,000,000,000,000 – is syphoned out of developing countries through these types of corrupt activities. If this money had been taxed, the revenues could have been used to build hospitals, schools and help end extreme poverty.
Lifting the veil by publicly disclosing who is behind these mysterious webs of companies and trusts is essential in tackling corruption around the world. For this reason, ONE has been following the revision of the EU’s 4th Anti-Money Laundering Directive (AMLD) – where we’re calling for information about who really owns and controls EU companies and trusts to be made public.
Civil society’s efforts have led to promising developments which could be a huge win for the fight against corruption. However, we need all the pieces to solve the puzzle. Citizens, journalists and governments need to see the full picture in order to be able to follow the money and root out corruption. That means public access to information about company and trust ownership.
As negotiations continue, the coming months will prove whether the EU has the resolve to close loopholes to make new AMLD rules show the complete picture.