Monday

14th Jun 2021

States keen to protect identity of Europe's shadow rich

EU states are trying to stop the general public from finding out who really owns what in Europe’s offshore firms, trusts, foundations, and other opaque structures.

The anti-money laundering directive (AMLD) is entering the final stage of negotiations on Tuesday (16 December) in Brussels in so-called trialogue talks between MEPs, diplomats, and European Commission officials.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

It's designed to clamp down on tax evasion and organised crime.

Some campaigners say it could also have strategic consequences by exposing the scale of corruption in EU neighbouring countries, such as Russia.

The European Parliament wants national governments to set up a publicly accessible register on “beneficial ownership”.

“We are doing everything that we can to have that through in the final text of the directive,” Latvian centre-right deputy Krisjanis Karins, one of the assembly’s two lead negotiators, told EUobserver.

But a leaked compromise text, seen by this website, indicates that a blocking majority of member states is keen to maintain a veil of secrecy.

They don’t oppose creating the register. But they insist on restricting access to “competent authorities”, such as national Financial Intelligence Units (FIUs).

The commission’s proposal is to restrict access, but to let people who can demonstrate a “legitimate interest” - such as investigative journalists or NGOs - see the registry as well.

Tamira Gunzburg, the Brussels director of the One campaign - a pro-transparency pressure group - said Austria, Croatia, Denmark, France, Finland, Slovenia, Sweden, and the UK back public access.

But Germany, Poland, and Spain oppose it, while the commission doesn’t have a vote.

Some countries want the register to give the name and date of birth of the owner, while others also think this is too much.

Meanwhile, there is uncertainty on how to close loopholes on trusts - among the most tricky of the “discretionary structures” used by people to hide their wealth.

“The momentum for transparency is growing every day,” Gunzburg noted.

At the same time, Karins said "it's not quite clear in the end how trusts will or will not be directly handled in this directive … ideas are simple, cheap, and easy, but actually finding the language which casts the net properly is a challenge."

LuxLeaks

Pressure is mounting on the EU to do more after media revelations of tax-dodging schemes in Luxembourg.

Leading journalists from 23 countries last week wrote to commission chief Jean-Claude Juncker, a former Luxembourg PM, to take action after the “LuxLeaks” scandal.

He responded to say he backs the AMLD register, but repeated the commission line that only people with a “justified legitimate interest” should get access.

The parliament’s Karins noted the AMLD and LuxLeaks cover different ground.

“This directive is really about money-laundering and terrorism financing, whereas LuxLeaks is a tax avoidance issue which raises serious questions about competition,” he explained.

But he said the Juncker furore has come up in the AMLD trialogues in terms of political atmosphere.

MoscLeaks?

For her part, Elena Panfilova, the Moscow head of Transparency International, a European NGO, believes corruption also has a strategic meaning.

On one hand, state embezzlement in Russia has depleted the Kremlin’s rainy day fund and its ability to resist EU and US sanctions.

But on the other hand, clandestine Russian money is being used to influence European companies, politicians, and media.

Panfilova told EUobserver that if the general public in Russia could see how much of their taxes the nomenklatura has stashed in Europe it would harm Vladimir Putin’s popularity.

It might also help to rein in the administration’s greed.

“A strong AMLD is one of the most important contributions the EU could make to reform and rule of law in Russia”, she said.

“The missing money means schools not funded properly, hospitals not built. For Russian people it’s not funny money, it’s literally killing them”.

EU tax havens drain money from developing nations

Tax havens in places like Luxembourg are zapping billions of euros from the coffers of developing countries and forcing weak governments to rely on dwindling international development aid, experts say.

Frontex chief: 'about time' MEPs probe his agency

Some 14 MEPs have created a group to probe allegations of rights abuse by the EU's border agency Frontex. Its head, Fabrice Leggeri, welcomed its creation and said it "is about time".

Romania denies forcing migrant-boat back to Turkish waters

Romania's ministry of internal affairs wrote to Frontex claiming it did not engage in any illegal pushbacks of people on rubber boats into Turkish territorial waters. The country says it followed EU engagement rules and Greek orders.

LGBTI fears over new Polish member at EU institution

A letter sent to the European Economic and Social Committee by a group of cross-party MEPs fighting for LGBTi rights expresses fears that a recently-appointed Polish member may try to undermine those rights.

News in Brief

  1. Swiss voters reject climate change measures
  2. Spain: Thousands protest against Catalan leaders' pardon
  3. Belarus opposition leader says 'harsh' sanctions needed
  4. Far-right ex-settler becomes Israeli prime minister
  5. EU top court fast-tracks rule-of-law case to October
  6. Hungary's Fidesz wants to ban LGBTIQ content for under-18s
  7. MEPs join EU citizens on farm-animal cage ban
  8. Council of Europe urges Russia to release Navalny 'immediately'

Feature

Covid-hit homeless find Xmas relief at Brussels food centre

The Kamiano food distribution centre in Brussels is expecting 20 people every half hour on Christmas Day. For many, Kamiano is also more than that - a support system for those made homeless or impoverished.

Top court finds Hungary and Poland broke EU rules

EU tribunal said Hungary's legislation made it "virtually impossible" to make an asylum application. Restricting access to international protection procedure is a violation of EU rules.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. Brexit grumbles overshadow UK summit
  2. Former French PM to work for Russian oil firm
  3. Lobbyists push to greenwash EU rules for renewable hydrogen
  4. UN report on pushbacks draws cautious EU response
  5. Biden in Brussels, recovery package underway This WEEK
  6. Nato's biggest enemy hides within
  7. The Dutch politician suing the Dutch state for ethnic-profiling
  8. EU urges Poland to step back from 'legal primacy' clash

Join EUobserver

Support quality EU news

Join us