EU Toughens Anti-Money Laundering Rules

An agreement reached by the European Commission (EC), European parliament and European Union (EU) member states paves the way for a tougher anti-money laundering (AML) regime. It will lead to the creation of a central register recoding the ultimate ownership of all Europe-based companies or trusts.

Owners of secretive companies in Europe will have a harder time keeping it from the public eye as the registry will be accessible to anyone with a “legitimate interest” in identifying owners, such as investigative journalists and concerned citizens – although activists had pushed for access to be made fully public.

“For years, criminals in Europe have used the anonymity of offshore companies and accounts to obscure their financial dealings,” said Krisjanis Karins, a Latvian politician and member of the European parliament, who has lobbied for the proposed law.

“Creating registers of beneficial ownership will help to lift the veil of secrecy of offshore accounts and greatly aid the fight against money laundering and blatant tax evasion.”

The agreement comes a month after the so-called ‘LuxLeaks’ scandal that exposed often secret deals that saved many of the world’s largest companies billions of dollars in taxes by routing profits via Luxembourg. The deals were made when Jean-Claude Juncker , the new president of the EC, was the country’s prime minister.

Juncker last week urged swift approval of the measure, though under the condition that access to the registry will be limited to those with a legitimate interest in accessing the information.

While financial transparency activists acknowledged the agreement represented progress, many criticised its more limited scope. “It is disappointing that amidst financial secrecy scandals and promises for more transparency, the EU fell short of allowing the public to see who is behind anonymous shell companies and trusts,” said Tamira Gunzburg, of the ONE advocacy group in Brussels.

According to the group, Germany, Spain and the UK resisted opening up the list to a broader audience, ultimately leaving it to “member states to determine who will have access to the information”.


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