A global investigation, involving some 400 journalists from 80 countries, into the use of secret companies by the rich, powerful and corrupt has shown how a network of lawyers, bankers and others around the world hide illicit wealth. Transparency International (TI) calls on the international community to act immediately to adopt transparency laws to outlaw secret companies.
The Panama Papers, a massive leak of financial documents, reveal the offshore holdings of 140 politicians and public officials, including 12 current and former world leaders, who used more than 214 000 offshore entities to hide the ownership of assets.
“The Panama Papers investigation unmasks the dark side of the global financial system where banks, lawyers and financial professionals enable secret companies to hide illicit corrupt money. This must stop. World leaders must come together and ban the secret companies that fuel grand corruption and allow the corrupt to benefit from ill-gotten wealth,” said José Ugaz, the chairperson of TI.
TI is calling for a renewed push for G20 countries to agree that public beneficial ownership registers should be the global standard, and sanctions applied to jurisdictions that do not conform to this standard. This would include not just the G20, but also the numerous countries big and small where the creation of secret companies is big business.
“How many more massive document leaks do world leaders need to see to understand that the lack of public registers of beneficial owners of companies is what keeps global grand corruption schemes alive and well?” Ugaz said.
TI wants public registers of all companies’ beneficial owners to make it harder for the corrupt to hide their illicit wealth in secret companies and trusts that use nominees to register ownership. The G20 have supported measures to increase beneficial ownership transparency, but have done little to implement them.
“As more information is revealed about how a network of financial middlemen, lawyers, accountants and big banks facilitate both the movement of illicit wealth and the way to disguise who actually owns it, it is clear what has to be done. Enablers who help companies set up secret companies must be sanctioned and jurisdictions that welcome secrecy, must be outlawed,” said Elena Panfilova, TI’s vice-chairperson.
TI has named the state of Delaware, home to thousands of anonymous shell companies thanks to its strict corporate secrecy rules, as part of its Unmask the Corrupt campaign (Unmaskthecorrupt.org) specifically because its corporate registration rules help people hide the true owners of companies.
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