Press release 27th May 2021

G7: Global standards on anonymous company ownership essential for inclusive economic recovery

May 27, 2021 - The G7 should explicitly endorse the global adoption of beneficial ownership registers to prevent kleptocrats from undermining the recovery from COVID-19, Transparency International said today.

Chancellor Rishi Sunak will meet virtually tomorrow (May 28) with finance ministers and central bank governors from the G7, ahead of an in-person on June 4-5 to discuss the group’s priorities. Under the UK’s Presidency, these include building a green and inclusive global economic recovery and supporting vulnerable countries to recover from the pandemic.

Transparency International UK, alongside representatives from Transparency International chapters in each G7 country, is calling for a particular emphasis on measures for tackling decades-long abuse of corporate secrecy.

Read the letter.

Complex networks of shell companies, elements of which can often be traced back to Britain’s offshore financial centres, enable corrupt actors to drain treasuries; traffic arms, drugs and endangered species; and exert authoritarian influence on democracies worldwide.

 

Daniel Bruce, Chief Executive of Transparency International UK, said:

“Anonymous shell companies are a well-recognised tool of kleptocrats and organised crime groups involved in the trafficking of drugs, arms, endangered species and people. Despite growing evidence of their use for illicit finance, the international community has been slow to act decisively against anonymous companies. The G7 now has the opportunity to lead the path to long-lasting solutions by implementing strong measures at the national level and by pushing for stronger global standards.”

 

Many countries, including G7 members, have taken significant steps to end anonymous companies by establishing registers of their true – or beneficial - owners. The UK, and now France and Germany, have set up registers and made them publicly available. Britain’s Overseas Territories have committed to implement their own registers by 2023.

But recent investigations and scandals confirm that progress in tackling the abuse of anonymous companies will only be possible if information about beneficial owners is available in all jurisdictions, and if authorities are able to make use of that information and cross-check data in a timely manner.

As members of the Financial Action Task Force (FATF), which sets international anti-money laundering standards, G7 countries also have a unique opportunity to push for advancing beneficial ownership transparency globally. FATF is currently reviewing its recommendations on beneficial ownership transparency, presenting a unique opportunity for G7 leaders to state their position and unequivocally endorse proposals for banning anonymous company ownership in all jurisdictions.

“We are aware of the determined resistance within the FATF membership, particularly from key financial centres, but merely cosmetic changes are not enough. When you meet on 4-5 June, we urge the G7 to show its leadership and support a meaningful review of the current global standard on beneficial ownership to ensure it is fit for purpose,” concludes Transparency International’s letter to the G7 Finance Ministers and Central Bank Governors.

 

Notes to editors

  • Read the letter here.
  • Transparency International UK’s research has previously shown how 1,201 different companies registered in Britain’s Overseas Territories have aided gross abuses of entrusted power for private gain around the world.
  • FATF requires governments to ensure that authorities can find out who the real or ‘beneficial’ owners of companies registered in their territory are, but the current global standard does not specify how that needs to be ensured.
  • In February 2021, a petition from 700 academics, business leaders, public bodies and civil society organisations from 120 countries called on the UN General Assembly Special Session against Corruption, UNGASS 2021, to set a new global standard on beneficial ownership transparency.