Editorial: Interdicting economic crime through beneficial ownership: an international standard at last?
| DOI | https://doi.org/10.1108/JMLC-05-2022-150 |
| Published date | 08 June 2022 |
| Date | 08 June 2022 |
| Pages | 489-492 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Dominic Thomas-James |
Editorial: Interdicting economic
crime through beneficial
ownership: an international
standard at last?
Introduction
The global anti-money laundering (AML) regime presupposes a significant degree of compliance
with minimum standards. Experience has shown that this is easier to achieve in some areas, than
others. One of the problems of the global approach to the interdiction of economic crime and the
rules based approach to financial regulation is that minimum benchmarking often creates tension
between some countries that consider they are compliant, with those who regard their technical
compliance with circumspection. Simply put, for all the advantages of harmonisation, a one-size-
fits-all approach is not always the most suitable depending on jurisdiction. Other issues include the
fact that some standards presuppose significant human and capital resources, which may be at
odds with development-related priorities or other challenges that some states face. Regardless, the
international AML standard bearer, the Financial Action Task Force (FATF), and its
recommendations have manifested as non-optional soft law. It is non-optional not in the strictly
legal sense, but rather that non-compliance is simply not an option for states seeking to secure their
place in the international community and avoid ending up on influential black or greylists –the
effects of which are self-evident in terms of de-risking. Offshore financial centres have long been
suspected to be the weak links in the global financial system. However, as shall be considered in
this briefing, compliance commitments made by certain of their number certainly align with the
spirit of international standards. It considers the recent amendments to FATF recommendation 24
on beneficial ownership, alongsidecommitments made by certain offshore jurisdictions thus far.
Offshore, the overseas territories and beneficial ownership standards
Within the broad and complex area of offshore finance, a subjectwith which there continues
to be relatively little meaningful research, there is a group of jurisdictions which receive a
disproportionate level of attention: the British Overseas Territories (OTs) (and, for that
matter, Crown Dependencies –albeit their relationship with the UK is different than the
OTs). Allegations emanating from successive ICIJ offshore data leaks, such as the Panama,
Paradise and, most recently, Pandora papers, have thrust the OTs under the transparency
spotlight. Notwithstanding that many of these jurisdictions have micro-population and are
relatively remote island nations in the Caribbean and North Atlantic, their development as
offshore markets has led to their being held to the same high standards as larger,
metropolitan jurisdictions [1]. Criticisms internationally pertain to facilitating aggressive
tax avoidance of large multinational corporates, to facilitate criminality through various
vehicles, services and professionals.Thus, there has been a longstanding and powerful anti-
tax haven campaign.
In the aftermath of the Panama and Paradise papers data leaks,legislation was enacted
in the UK Parliament under section 51 of the Sanctions and Anti-Money Laundering Act
(SAMLA), to compel the OTs to implement public registers of beneficial ownership
information by the end of 2023, elseface having them imposed via Orders in Council. Many
of the territories are, largely, self-governing –with constitutions recognised by UK Acts of
Editorial
489
Journalof Money Laundering
Control
Vol.25 No. 3, 2022
pp. 489-492
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-05-2022-150
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