Editorial
| DOI | https://doi.org/10.1108/JFC-10-2020-224 |
| Pages | 1009-1012 |
| Published date | 07 December 2020 |
| Date | 07 December 2020 |
| Author | Dominic Thomas-James |
| Subject Matter | Financial crime,Accounting & finance |
Editorial
The cost of “going public”: examining recent public beneficial ownership
register commitments
Traditionally, the ideaof holding company information extended little beyond suchrelating
to its mere existence. Today, either through central or public registers, the regulatory
position pertains to increased transparency as to ultimate ownership. With the accepted
nexus of money laundering and the ability to hide behind the corporate veil, it is
unsurprising that corporate anonymity has become the target of the tax justice and
transparency lobby and governments alike with the UK and EU taking the lead. However,
problems arise when considering what the international standard is. The standard-bearer
for anti-money laundering(“AML”) regulation is the Financial Action Task Force(“FATF”).
On BO, their Recommendation 24 statesthat:
[...] countries should ensure that there is adequate, accurate and timely information on the BO
and control of legal persons that can be obtained or accessed in a timely fashion by competent
authorities [1].
While this does not prioritise between centrally held or public registers, it clearly invokes
the central register framework complemented by bilateral information exchange to share
BO information with authoritiesand thereby assist foreign investigations.The 4th EU AML
Directive (2015) alignedsomewhat with this standard, stipulating that such informationcan
be held in a central or public register [2]. Removing what might appear to be a reasonably
held expectation of choice, the 5th EU AML Directive goes furtherby stipulating that states
should provide access to any member of the general public [3]. The very wording of this
standard invokes the notion of the public right to scrutinise, which aligns with the UK’s
approach in terms of its publicregister and that which it has sought by legislation to impose
on OTs.
However, outside the UK and EU, public registers are not a global norm. As recent as
2018, only 6 G20 countries hadfunctioning central registers [4], let alone publicly accessible
ones. Even within the EU, appetite for a unitary approach has been protracted. By March
2020, only 5 (including theUK) of 27 states have implemented freely accessible registers.By
comparison, with theUSA only recently tabling legislation to create a centralregister [5], the
prospect of a public one seems unlikely.
The transparency campaign relies at its core on the notion of “nothing to hide”[6]. In
other words, business which is legitimate ought to have no reticence of its ownership
information being publicly accessible. This gives rise to an adverse presumption that if a
company objects to complete transparency of its information, then it must have something
to hide. The implication is that central registers do not suffice, despite them forming the
basis of FATF r24 and that providing such information to domestic and foreign law
enforcement is substandard tothat same information being public. Exemplifying this point,
one of the architects of the “public register”amendment of SAMLA stated:
The territories may well allow access to law and order agencies, within an hour in the case of
terrorism, through closed registers, but that does not allow civil society –charities, NGOs and the
media –to expose them to the sort of scrutiny that the Paradise and Panama papers did [7].
Many jurisdictions, and in this context those OTs which have developed sophisticated
business sectors, have built their economies upon the provision of offshore financial
services. Confidentiality as a concept has been an intrinsic element of their economic and
Editorial
1009
Journalof Financial Crime
Vol.27 No. 4, 2020
pp. 1009-1012
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-10-2020-224
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