Campaigners warn against diluting the Anti-Money Laundering Directive

Laundering euros [Images Money/Flickr]

As representatives of the EU institutions will meet tomorrow (16 December) to strike a deal on the EU Anti-Money Laundering Directive, a pressure group has warned that the stakes are high, as member states could be tempted to drop a mandatory public register of who controls anonymous trusts and companies.

The Anti-Money Laundering Directive (AMLD) could be a historic breakthrough in the battle against corruption, but if member states don’t include public registers about who owns and controls anonymous companies and trusts, the missed opportunity would be “disastrous”, ONE, the campaigning and advocacy organization co-founded by Bono, the frontman of U2, has warned.

Under the AMLD as adopted by MEPs last March, a public central register in each EU country would list information on the ultimate beneficial owners of all sorts of legal arrangements, including companies, foundations, holdings and trusts. The aim is to make dodgy deals harder to hide and fight tax evasion.

The legislative resolution on the AMLD was passed on 11 March by 643 votes to 30 with 12 abstentions.

ONE is worried that the parliament may yield to pressure from the Council, where member states sit, to make a deal that doesn’t include public registers of who’s behind secret shell companies and trusts that help steal money from developing countries.

At the time when the Parliament adopted its position on the directive many member states used to be against the Directive, but that has changed, the number of member countries calling for a public register of companies having reportedly quadrupled over the last few months. Reportedly, the Czech Republic, Denmark, Sweden and the Netherlands have changed their position for the best, the Luxleaks scandal having impacted positively in that sense.

According to calculations by ONE, 1 trillion dollars are siphoned out of developing countries every year as a result of corruption, tax evasion, and other illegal activities.

Tamira Gunzburg, Director of the ONE Brussels office, published an open letter, calling on the two European Parliament representatives to the trilogue, to hold firm and not to bow to pressure from member states or of the Italian Presidency. The two Parliament representatives to the trilogue are MEP Krišj?nis Kari?š (EPP, Latvia) and MEP Judith Sargentini (Netherlands, Green/EFA group).

Gunzburg further argues that knowing who really owns and controls anonymous shell companies and trusts often used to siphon much-needed funds out of developed and developing countries is a “once in a mandate opportunity to land historic transparency measures”.

Conversely, she says that caving in to the Council by accepting a deal that does not include full public access to information on beneficial owners would be a breach of the original Parliament position and a betrayal of the commitments made to citizens.

“With anonymous shell companies and trusts often being used to siphon much-needed funds out of developed and developing countries alike, knowing who really owns and controls these entities would go a long way to follow the money and root out corruption,” Gunzburg writes.

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