How the G20 could unmask the corrupt

The G20 leaders meet in Australia later this year. Pressure is growing on them to build on the commitments from last June’s G8 Summit on beneficial ownership.

That’s an obscure phrase for an ugly truth: corrupt individuals from around the world are able to hide their money through complex corporate and trust structures, such that when an obscure buyer pays for a football team or a mansion in London, it is impossible to find out where the money really comes from – or who is the ‘beneficial owner’.

These complex structures mean that the corrupt are able to mask their wealth, and often hide behind the mask to appear as benevolent philanthropists or self-imposed exiles from their home countries.

Transparency International has come to believe that it is time to unmask the corrupt. We have spent twenty years helping to put in place a global legal framework backed by international conventions.  We know more than ever before about how corruption operates. And yet we still witness at first hand, through our global network of 100 chapters, the victims of corruption – from individuals denied basic healthcare to entire societies ravaged by war. We are now launching a new campaign to ensure that there is no hiding place for those who perpetrate and benefit from corruption.

The G20 leaders have it in their power to take a significant step forward in the fight against corruption.  A key part in unmasking the corrupt is to strip away the entirely unnecessary secrecy that surrounds beneficial ownership. Here are four things we are proposing for the G20:

  • Governments should require information about who ultimately owns, controls or benefits from companies to be included in central business registries and make them public.
  • As an immediate measure, governments must require companies bidding for government contracts to disclose who owns, controls or benefits from the company. This helps ensure corrupt officials are not awarding themselves or their friends government contracts without proper scrutiny.
  • Countries with direct influence over secrecy jurisdictions – like offshore tax havens – should ensure that they establish public registers including beneficial ownership information.
  • Effective regulation shoud be put into place, and enforced, to make sure that  financial institutions, lawyers, accountants and others intermediaries are not complicit in corrupt acts by undertaking full due diligence measures. Real estate agents, casinos and other such professions must also ensure they do comprehensive background checks and due diligence on the people and companies they work with.

There is some good news. The UK government has, to date, led the way on this – and in the Queen’s Speech it was announced that legislation would be brought forward to create a public register of beneficial ownership in the UK. Much more needs to be done in the UK and elsewhere. You can read our comments here on what needs to happen in the UK.  And you can read here the comments by TI’s global Chair, Huguette Labelle, on why the world community needs to act.

Carousel image: Creative Commons, Flickr / Ashley MacKinnon

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Robert Barrington

About Robert Barrington

Robert Barrington is the executive director of Transparency International UK.

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3 Responses to How the G20 could unmask the corrupt

  1. francesco totino 26 June 2014 at 9:04 am #

    A European Strategy for growth

  2. Mike Gogan 16 July 2014 at 9:09 pm #

    Looking at this issue from the UK, it’s clear that one major obstacle to progress is the lack of support from the mainstream press. This support is unlikely to come as long as the press is controlled by the very people who exploit complex rules on taxation and transparency. For example, the Telegraph is controlled from the Channel Islands ; the Mail’s owner is based, for taxation purposes, in France; the Independent is owned by a Russian; News UK is ultimately controlled by an American; the Guardian also uses off-shore facilities. Who’s left? Richard Desmond’s Express doesn’t really inspire much confidence.

    Let’s also look at the people that David Cameron has brought in to Government: Stephen Green, who headed HSBC during the years it was laundering billions in drugs money, was elevated to the House of Lords and appointed as a Trade Minister; Philip Green of Arcadia Group paid himself £1,000,000 in one year alone and diverted the dividend through Monaco. Nonetheless, he was deemed to be a suitable person to advise the Government on entrepreneurship.

    It’s a regular feature of our Parlaiment for MPs and members if the House of Lords, who are directly employed by large businesses, to debate and vote in favour of legislation that is of direct benefit to their employers.

    Given the fairly obvious entrenchment of vested interested in the seats of power in this country I would suggest we have some way to go before we see any real progress


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