Wednesday, March 05, 2014

Trustbusting in the EU

The European Parliament has moved forward with plans to bust open trusts:

The ultimate owners of companies and trusts would have to be listed in public registers in EU countries, under updated draft anti-money laundering rules approved by the Economic Affairs and the Justice and Home Affairs committees on Thursday. Casinos are included in the scope of the draft rules, but decisions to exclude other gambling services posing a low risk are left to member states.


Under the anti-money laundering directive (AMLD), as amended by MEPs, public central registers - which were not envisaged in the initial Commission proposal – would list information on the ultimate beneficial owners of all sorts of legal arrangements, including companies, foundations and trusts. "If we had decided to leave trusts, for example, out of the scope of this new legislation, then it would immediately have made them a perfect vehicle for criminals wishing to avoid taxation or launder their illegal money into the financial system", Ms Sargentini noted.

EU member states would have to make registers "publicly available following prior identification of the person wishing to access the information through basic online registration", MEPs say. They nonetheless inserted several provisions in the amended AMLD to protect data privacy and to ensure that only the minimum information necessary is put in the register. For example, registers would show who is behind a given trust, but would not reveal details of what is in it or what it it is for.

The London money-laundering industry is of course going apeshit, presenting it as an attack on the privacy of ordinary citizens. But what it actually means is that the dictators and kleptocrats they service will be stripped of their anonyminity, allowing their assets to be identified, frozen, and returned to their rightful owners. Those dictators and kleptocrats will therefore seek to launder their money elsewhere - and that's the real concern of the UK press.

Meanwhile, given that we are also being used to launder money through the vehicle of "New Zealand foreign trusts", we need to do this too. Failing to do so is being a bad international citizen, and directly enabling tax-evasion and money-laundering.