The Paradise Papers expose yet again the scale of abuse enabled by the offshore system and anonymous companies and trusts. A year and a half after last year’s major offshore scandal, the Panama Papers, the EU has done nothing to address these problems.
Anonymous ownership allows companies and trusts to be used as getaway cars that enable money laundering, corruption, terrorism, tax evasion and human trafficking – with devastating impacts for people across and beyond Europe. The 5th Anti-Money Laundering Directive is a unique opportunity for the EU to address this problem and make public the real beneficial owners behind anonymous companies and trusts.
While the role of companies in facilitating financial secrecy is well documented, often as a result of action by law enforcement or other authorities, the secrecy around trusts is so strong that law enforcement authorities admit to stopping investigations when they encounter trusts. The recent offshore leaks, the Paradise Papers, provide many new examples of the scale of using trusts, including in cases connected to tax evasion.
This briefing looks at several case studies involving trusts, as revealed by the Paradise Papers, in light of ongoing negotiations for changes to the EU’s Anti-Money Laundering Rules. It makes the case for public registers of beneficial owners for trusts connected to the EU.
Nienke PalstraSenior Campaigner, Digital Threats
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