European capitals have been accused of “dragging their feet” after it emerged a majority are still flouting Brussels’ anti-money laundering laws.
Britain, despite having quit the European Union in January, is one of few countries respecting the European Union’s transparency regulations. The bloc was forced to set up the measures in the wake of the Panama Papers scandal that implicated dozens of European individuals and firms taking advantage of offshore tax arrangements. But five years after Brussels agreed its directive, just six EU capitals out of the 27, as well as the UK, have fulfilled their obligations.
British NGO Global Witness said: “It’s disappointing that despite having two years to get this right many of those in the EU are still dragging their feet.”
Most EU member states failed to meet the legal deadline to introduce the public registers of the real owners of companies, the main measure in the bloc’s fight against money laundering.
The directive was agreed in May and obliged governments to publish the beneficial owners of firms refigured in their jurisdictions by January this year.
It was designed to prevent anonymous shell companies being globally exploited for corruption, financial crime and financing terror.
Tina Mklinaric, of Global Witness, said: “Transparency over company ownership is a key tool in fighting corruption, in an age where the corrupt have exploited global financial secrecy to move around large sums of stolen wealth.
“It’s disappointing that despite having two years to get this right many of those in the EU are still dragging their feet.
“At the appropriate moment it’s vital that the EU addresses its members who have yet to publicly reveal company ownership. This means being prepared to sanction those that have not met its deadline, and enforcing the rules that it has gone to great pains to set.”
Despite leaving the EU, Britain has implemented a system that provides free access to beneficial ownership data through Companies House.
Many EU member states have simply failed to create similar registers, but some have even attempted to create artificial hurdles to restrict public access, according to Global Witness.
Greece has legislated so beneficial owners are notified if someone has searched for the register for their company.
Global Witness fear this allows for “tipping off” of those under investigation by anti-corruption campaigners or journalists.
They also found that five countries have refused access to the data altogether.
Portugal and Poland have stopped the public from searching the records for a company unless they know its tax identification number.
And eight countries, including Greece and Italy, have decided to make people pay to access their registers.
During tense post-Brexit negotiations, Brussels wanted to tie Britain into a level-playing field amid fears Boris Johnson could slash and burn regulations and standards.
Michel Barnier, the EU’s chief negotiator, has refused to drop the demands despite the Prime Minister reassuring the bloc he has no intension of starting a regulatory bonfire.