Monday

18th Dec 2017

Opinion

Time for action on financial transparency

  • Washing machines: MEPs are set for a committee vote on the anti-money laundering directive on 13 February (Photo: BLPerk)

On 13 February the European Parliament will have a once-in-a-decade opportunity to vote for legislative revisions to the current EU Anti-Money Laundering Directive (AMLD).

If implemented correctly, a revised AMLD could have a tremendous impact on the battles against corruption, drug trafficking, tax evasion and a slew of other criminal activities all currently facilitated by the ease in which money can still be laundered in Europe today.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The draft EU AMLD would, in part, require all companies registered in the EU to hold details of who really owns and controls them – their beneficial owners. This might not sound like much but consider this: in Europe less personal information is asked of a company opening a bank account than there is of an individual applying for a driver’s license, to rent an apartment or to simply obtain a library card.

As a result, many companies are opened in names unassociated with that of the person who really owns or controls them. And once a bank account has been opened in a false name, if illegal activity is suspected it is almost impossible to follow the money laundering criminal money trail back to the owner.

A public register would have made it more difficult for mafia organisations Cosa Nostra and Camorra to use Italian and other shell companies to launder huge sums of money. Over the last decades, Italian mafia groups used Italian companies to defraud the European Union out of millions of euros that were meant to be used to regenerate Europe’s poorest regions.

Last year, the European Commission hired accounting firm Deloitte to look into the effectiveness of the current AMLD. They found that it did not do enough to combat international or even pan-European money laundering schemes.

One of the short-comings high-lighted in the study was the difficulty banks have in identifying an account’s beneficial owner.

Not only can the due-diligence be a costly and time-consuming undertaking, but without substantial prohibitive measures in place, the incentive for banks to chase down information about wealthy clients is sometimes missing.

We belong to those who feel we need to go a step further and require European countries to set up registries of the beneficial owners of companies.

These registers should be publicly accessible.

By sharing company ownership with all interested parties - including banks, law enforcement, journalists, citizens and NGOs - we can ensure that adequate oversight is guaranteed and information is made available to those who need it.

Bankers will be able to follow through on due diligence, law enforcement will be able to attach names to proceeds from crime, journalists can research political contributions or other questionable or even illegal donations (and many other stories of corruption) and average citizens or small businesses could learn, for example, to better understand who is behind their partners, suppliers or customers.

Providing beneficial ownership information to the public registry would not require much from the companies beyond sharing information they should already possess such as the company beneficial owner’s full name, date of birth, the means of exercising control over the company, contact details and information detailing the legal shareholders.

With the AMLD vote, Europe has the potential to set the standard on anti-money laundering for the rest of the world. So much good to be done with relatively little effort - we hope MEPs from other member states are as clear about the wealth of possibilities as we are.

Cecilia Wikstroem is a Liberal Swedish MEP. Koen Roovers works in Brussels for the Financial Transparency Coalition, an international network of not-for-profit groups which advocates transparency and accountability in the global financial system

Iceland: further from EU membership than ever

With fewer pro-EU MPs in the Iceland parliament than ever before, any plans to resume 'candidate' membership of the bloc are likely to remain on ice, as the country prioritises national sovereignty and a more left-wing path.

Stakeholders' Highlights

  1. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  2. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  3. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  4. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  5. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  6. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  7. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  8. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  9. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  10. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  11. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  12. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties

Latest News

  1. Far-right enters government in Austria
  2. UK should work more closely with MEPs on Brexit
  3. EU set to probe Ikea tax affairs
  4. Estonia's last chance to land green energy results
  5. Catalonia, Brexit, and Uber on EU agenda This WEEK
  6. Macron and Merkel take tough line on Poland
  7. Eurozone future needs structural reforms, EU leaders told
  8. Showdown EU vote on asylum looking likely for next June

Stakeholders' Highlights

  1. EPSUEU Blacklist of Tax Havens Is a Sham
  2. EU2017EERole of Culture in Building Cohesive Societies in Europe
  3. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage
  4. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  5. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  6. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  7. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  8. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  9. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  10. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  11. Dialogue PlatformThe Turkey I No Longer Know
  12. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives