G20 and corporate transparency: put your money where…

Legal authorities responsible for uncovering dirty money – such as tax authorities, law enforcement agencies and financial intelligence services – should not be the only ones with access to registers. Foreign authorities use registries to track possible suspicious transactions around the world. Obligated entities – i.e. banks and other financial institutions with legal responsibilities to conduct customer due diligence – need access to this data to carry out sufficient controls. Law-abiding investors and businesspeople also need this to ensure they don’t work with shady or corrupt partners. Journalists, civil society organizations and academia use registries for their stories and research to identify illicit financial flows and understand risks and policy gaps. More broadly, members of the public can also support this effort. Yet only four countries have or plan to have public access to their registries.

The United Kingdom is one of the countries where the registry remains open to public access, which is a analysis by Transparency International UK of the 146,948 Limited Liability Partnerships (LLPs) formed between April 2001 and September 2021. Using registry data, they found that more than one in ten LLPs established during this period exhibited characteristics identical to those used in serious financial crimes, such as bribery, embezzlement of public funds and sanctions evasion.

The European Union, itself a member of the G20, was a leader in this effort with the 5th EU Anti-Money Laundering Directive of 2018, requiring all member states to open public access to registries. Unfortunately the The European Court of Justice ruled in November 2022
that public access was a violation of privacy and required countries to close it, while still recognizing that journalists and civil society organizations tackling money laundering have a legitimate interest. This was confirmed by the 6th Anti-Money Laundering Directive of 2024 that established journalists and civil society organizations involved in combating money laundering and predicate crimes should have general access to beneficial ownership registers. Nevertheless, the ruling remains a blow to transparency. Germany and the The Netherlands
blocked public access in the immediate aftermath of the ruling, and more recently France did that too. In accordance with the new EU rules, general access to the registers will have to be granted to all those with a legitimate interest.