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‘Russian Dolls’ call on the government to reveal the real owners of phantom companies

20 January 2014 - Campaigners today criticised the Government for failing to go far enough in tackling tax evasion and money laundering.

Christian Aid, Transparency Ireland and Debt and Development Coalition have called on the Government to support moves in the European Union to strip away the secrecy that hides the true owners of companies – secrecy which facilitates massive tax evasion and money laundering. The call has come as the European Parliament is about to make up its mind on the issue on Wednesday 22 January.

‘The secrecy provided to these types of companies enables tax evaders and money launderers to move their money around, concealing their identity in the process, and to operate with total impunity. Africa alone lost €850 billion to capital flight in 2010, most of which ends up in these types of structures’, said Sorley McCaughey, Head of Advocacy at Christian Aid.

‘The damage done to developing economies is huge, with billions of euro in revenue that could be spent on essential services being spirited out of developing countries every year’, Mr McCaughey added.

The Anti-Money Laundering Directive, which is currently being negotiated in Brussels, is at a crucial stage, with the European Parliament and the European Council of Member states finalising their positions ahead of final negotiations this month.

The campaigners called on the government to declare its support for the introduction of a register of the beneficial owners of companies - and crucially for it to be publicly accessible; something the government has so far failed to publicly support.

‘Having access to this register should not be the privilege only of shareholders or those with the means to buy access to it. All members of the public should have access to it - this is the gold standard of transparency, and is the basis on which the Revenue Authority operates in other areas’, said John Devitt, Director of Transparency Ireland.

Both the UK and France have indicated their intention to introduce public registers, regardless of what is decided at European level.

Campaigners likened the secrecy surrounding the true ownership of companies to Russian Dolls, with layer upon layer of disguised owners hiding the true flesh and blood beneficiaries of companies. This enables the identity of tax evaders and money launderers to be hidden.

‘It is incredible that the identities of the true owners of companies are not publicly listed. It is only those with something to hide that would oppose the introduction of such basic corporate transparency laws.’ said Nessa Ni Chasaide, of Debt and Development Coalition Ireland.

The European parliament will agree its position on January 22, to bring forward for discussion with the European Commission and Council. There are still divisions within the European member states as to whether a register should be public or not.

For further information please contact:

  • Sorley McCaughey, Head of Advocacy, Christian Aid Ireland. Tel: (353) 087 062 0062 or email smccaughey@christian-aid.org
  • Florence Mutesasira, Communications & Media Officer. Tel: (353) 086 160 9405 or email fmutesasira@christian-aid.org

 


 

Notes to editors:

1. In the Democratic Republic of Congo, for example, five mining contracts were awarded to anonymous companies in the British Virgin Islands at a vastly under market rate and then sold on at market rate to major extractive companies; the estimated cost to the DRC was $1.35 billion or twice the health and education budget. The identities of those who owned and benefited from the British Virgin Islands-based companies remain unknown. Public registries of the real, beneficial owners would address this problem and not only provide a way to identify those profiting and hold them to account, but also to deter such practices from ever happening.

2. Christian Aid works in some of the world's poorest communities in around 50 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects. For more information about the work of Christian Aid, visit www.christianaid.ie.. Follow us on Twitter at twitter.com/christianaidirl.