Learn About Illicit Financial Flows
Key Terms

New Report: Global Witness Spotlight On Money Laundering, Secrecy Jurisdictions, And Shell Companies

June 18, 2012

By Sam McWilliams

Sam McWilliams is a Media Intern at Global Financial Integrity.

Global Witness

Task Force coordinating committee member Global Witness released Grave Secrecy today, a report telling the story of companies which were used to launder the proceeds of corruption, tax evasion and other crimes.  The report shows how shell companies based the UK, Bulgaria, and New Zealand were used to launder corrupt money originating from Kyrgyzstan’s AsiaUniversialBank.

The report gives tailored recommendations to countries, the European Union and the Financial Action Task Force on what steps they can take to help fix these costly problems.  The report outlines how a lack of beneficial ownership information, off-shore secrecy jurisdictions and weak anti-money laundering and anti-corruption laws enable money laundering, and how the national and international actors can fix them.

Global Witness’ new report, Grave Secrecy, shows how companies can be used as cover to launder the proceeds of corruption, tax evasion and other crimes.  It is so easy to set up a company in a way that hides the owner’s identity that criminals, terrorists and corrupt politicians can easily move money around the world with impunity.  Hidden company ownership facilitates state looting, denying the citizens of poor countries the chance to lift themselves out of poverty and leaving them dependent on aid.

In one example from the report, we found that a Russian shareholder of a UK company died three years before the company was incorporated with someone apparently using his identity to move US$700 million around the world.  Such examples show how it is possible to set up a company in the UK (and elsewhere) without even the most basic of checks being carried out on the identities of the supposed owners.

Global Witness also released, An Idiot’s Guide To Money Laundering. (PDF link) The 5-step illustration shows your average Joe everything s/he needs to know about starting their very own money laundering endeavor.  This satirical, yet very accurate, break-down of how shell companies can be used for money laundering is impressive not only because of how easy they are to set up, but also how effective they are in ensuring anonymity.  Check out the Idiot’s Guide here.

Share

Disclaimer: Unless specifically stated to be the views of the Financial Transparency Coalition, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Financial Transparency Coalition.

Latest Press Releases

TED Prize Winner Charmian Gooch Announces Global Campaign to Abolish Anonymous Companies

Global Witness · March 19, 2014

Vancouver, Canada, March 18, 2014 –This year’s TED Prize winner – Charmian Gooch of Global Witness – has announced that she will use the prestigious million-dollar award “to make it impossible for criminals and corrupt dictators to hide behind anonymous companies.” The announcement was made live and online from the TED stage in Vancouver, with support from leading members of the business, political, law enforcement and campaigning community.

European Parliament Gives Overwhelming ‘yes’ Vote to End Secret Corporate Ownership

Financial Transparency Coalition · March 11, 2014

Joint NGO Media Reaction Financial Transparency Coalition – Eurodad – Global Witness – Transparency International EU Office – Oxfam Brussels, March 11, 2014 – Today, the European Parliament endorsed the creation of public registers of who really owns companies, trusts and other legal structures. This will make it much harder for criminals, tax evaders, corrupt politicians and other money launderers to hide their identity, and their illicitly-acquired assets, behind anonymous companies and trusts.

NGOs welcome MEPs’ vote for ground-breaking changes to fight money laundering

Financial Transparency Coalition · February 20, 2014

Joint NGO media reaction Financial Transparency Coalition – Eurodad - Global Witness - Oxfam A cross political party agreement in the European Parliament ...