In the coming days, Members of the European Parliament (MEPs) will face a clear-cut choice: to move closer to ending financial secrecy, or to stagnate within the current system of opacity. The specific issue at hand is whether corporations should be required to disclose beneficial ownership information, which identifies who actually owns a company.
The vote on changes to the EU Anti-Money Laundering Directive (AMLD) will take place on Tuesday, March 11, at the Parliament’s headquarters in Brussels.
The current system has bred a vast network of shell companies that are often used to funnel money that’s been gained from illegal practices, or embezzled from a government’s coffers.
Just last month, the European Parliament took a step towards genuine financial transparency, by passing a committee vote that would require centralized registers of the beneficial owners of all companies in the European Union.
If there’s one story you read today make it this one, from Politico Magazine. It’s triggered by the crisis in Ukraine, but it’s been a long time coming.
The point of this short story is clear: Western leaders are waking up to the fact that Russia no longer fears or even respects them. Why?
In many ways, both illicit financial flows and corruption are undefined and relative. For that reason, they’re both notoriously difficult to measure. The difficulty in measuring them in the first place may be part of the ambiguity surrounding their connection. Ambiguity aside, however, these concepts are highly interrelated. Here’s how.
“Corruption” can take on a lot of different meanings. FTC member Transparency International (TI) uses the following working definition of corruption: “the abuse of entrusted power for private gain.”
I imagine that definition is purposively vague and inclusive. Corruption isn’t just bribe paying, although that’s often it. It’s not just in business relationships, but also political, social, and even athletic ones. Corruption isn’t necessarily illegal, although usually it is. And in some cases, while it may be illegal, it isn’t always enforced, which makes it legal in practice.
Joint NGO media reaction
Financial Transparency Coalition – Eurodad – Global Witness – Oxfam
A cross political party agreement in the European Parliament puts pressure on EU member states to step up the fight for corporate transparency
Brussels, February 20, 2014
Soon it might be a lot harder for criminals, tax evaders, corrupt politicians and other money launderers to hide their identity and their illicit funds behind anonymous shell companies, following a key vote today in the European Parliament.
Today European parliamentarians from the Economic and Monetary Affairs (ECON) and Civil Liberties, Justice and Home Affairs (LIBE) Committees voted in favour of public registries which would provide information on the real, or ‘beneficial’, owners of companies. The long-awaited vote, which recommends significant improvements to the EU’s Anti-Money Laundering Directive (AMLD) and would make it much harder for criminals to launder their money using European companies. It would require each member state to establish registries that are open to the public upon online identification.
“By voting for publicly accessible registers of beneficial ownership, European parliamentarians have made a major breakthrough in the fight against international organised crime and industrial scale tax evasion” explained Koen Roovers, EU advisor for the Financial Transparency Coalition. “It will bring greater financial transparency and strengthen corporate accountability.”
Here’s the newest edition of TaxCast, courtesy of our colleagues at the Tax Justice Network.
In the February 2014 Taxcast:
Are European tax havens getting ‘illegal state subsidies’? The European Union’s Competition Commissioner thinks so. Are the world’s tax havens really going to become more transparent? We analyse the OECD’s automatic information exchange proposal, warts and all. And, the tax haven of the Bahamas is broke — and the government’s solution? Tax the poor! We look at the Bahamian campaign against a Value Added Tax and their demands for a freedom of information act.
Tax justice campaigners understand the link between tax and poverty. The more money a government can raise, the more funds it has at its disposal to help alleviate poverty. But the realisation that tax justice is a human rights issue is only starting to get wider attention.
The UN has played a major role in this. In May 2012 its committee on economic, social and cultural rights addressed the effect of austerity programmes on human rights. It said that all states should avoid taking decisions that lead to the denial or infringement of human rights. This can lead to political instability and have a significant impact on disadvantaged and marginalised people.
This year, when the Think Tanks and Civil Societies Program at the University of Pennsylvania (TTCSP), made its annual index of 2013 Global Go To Think Tanks, it chose four Financial Transparency Coalition members among its ranks. They included Global Witness, Tax Justice Network, and Global Financial Integrity, which ranked #32, #54, and $63 (respectively) for Think Tanks with the Best Advocacy Campaigns. FTC member Transparency International was also highly celebrated on the list, appearing a full twelve times, many of which were top ten spots. Among others, TI ranked #12 for Top Think Tanks Worldwide, #1 for Top Transparency and Good Governance Think Tanks, and #10 for Think Tanks with Most Significant Impact on Public Policy.
Every year, TTCSP releases this index to “acknowledge the important contributions and emerging global trends of think tanks worldwide.” And “gain understanding of the role think tanks play in governments and civil societies.” It compiles the list by eliciting nominations and receiving comments from literally hundreds of individuals and organizations around the world. These include current and former directors of think tanks, public and private donors, policymakers, journalists, scholars, civil society representatives, and academics. For a think tank to even be eligible for the list, it must receive no less than five independent nominations and then undergo two rounds of rankings from experts.
The rankings are a clear reason to celebrate the success of our FTC members, but they may also provide us with an opportunity for a moment of introspection.
The Philippines has made significant progress on its quest to confront corruption and tax evasion under the guidance of President Aquino. However, a new report by Global Financial Integrity shows one important—and growing—component of the problem is trade mispricing, specifically import under-invoicing, and its role in facilitating tax evasion in the Philippines.
In June 2010, Benigno Simeon Cojuangco Aquino III assumed his position as the 15th President of the Philippines. As a Senator, before his election to the Presidency, Aquino pursued an anti-corruption agenda. For example, Aquino contributed to the Preservation of Public Infrastructures bill—which raised standards in public infrastructure construction by penalizing contractors involved with faulty and low-quality construction—and the creation of a Congressional Oversight Committee to ensure the proper use of intelligence funds.
Since assuming the presidency, Aquino has pursued an agenda of economic growth and anticorruption. As part of this agenda, Aquino has also aggressively gone after tax dodgers and appointed the ruthless Kim Henares to head the Bureau of Internal Revenue. Henares has sent federal prosecutors after actresses, a doctor, and other auspiciously-wealthy individuals.
This article originally appear on the EU Observer’s website.
BRUSSELS - 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).
And now for all of you who have been trying to explain the concept of Anonymous Companies to your Francophone friends, Global Witness has translated its very helpful briefing. S’il vous plaît n’hésitez à partager loin!
The Financial Transparency Coalition issues play an important role in the context of global income inequality. By discouraging tax evasion and corruption among the world’s wealthy individuals and corporations, the FTC recommendations could play an important role in alleviating egregious and dangerous income disparity.
When we talk about global inequality, we are usually referring to one of two issues: (1) inequality between nations and regions and (2) inequality between individuals. Inequality between nations usually refers to the huge disparities between the average incomes of people in different countries. The other kind of inequality, that between individuals, refers to the overwhelming disparity of incomes between the world’s richest and the world’s poorest people.
Many of the world’s wealthiest individuals live in rich nations and many of its poorest live in poor nations, but not always. In fact, the world’s current wealthiest individual is Carlos Slim Helu, a telecom mogul from Mexico—the same nation where nearly half of the population lives in poverty, including 11.5 million men, women and children in extreme poverty. Likewise, Mukesh Ambani, whose net worth totals $21.5 billion, and Prince Alwaleed Bin Talal Alsaud ($20 billion), live in India and Saudi Arabia, respectively. While neither of these nations is among the poorest in the world, nearly one third of India’s population lives below the poverty line and one quarter of Saudi Arabia’s does.
February 20, 2014·
Joint NGO media reaction Financial Transparency Coalition – Eurodad - Global Witness - Oxfam A cross political party agreement in the European Parliament ...
December 5, 2013·
The FACT (Financial Accountability and Corporate Transparency) Coalition today praised Representative Lloyd Doggett (D-TX) and Representative Rosa DeLauro (D-CT) for the introduction ...
December 3, 2013·
Transparency International’s Corruption Perceptions Index 2013 offers a warning that the abuse of power, secret dealings and bribery continue to ravage societies ...