Posted in: news
14th November 2014
The G20 9th annual summit was held in November of 2014 in Brisbane, Australia. On the agenda were plans to increase global economic growth, create jobs, increase trade and reduce poverty as global economic recovery moved beyond the financial crisis of 2007.
The B Team Leaders seized the opportunity to address some of the world’s most influential decision makers on the issue of anonymous shell companies. In an open letter they called on governments and specifically the attendees at G20 to collect the identities of the people who ultimately own and control companies, and see benefit from them, and to agree to beneficial ownership principles to guide their actions.
You can read the full letter below:
At the conclusion of the Summit the G20 endorsed the 2015-16 Anti Corruption Plan and committed to implementing the G20 High-Level Principles on Beneficial Ownership Transparency. This includes 10 points of action that each country is committed to implementing and sharing their progress on, including a universal definition of a Beneficial Ownership, ensuring that authorities such as law enforcement and tax authorities have access to current, accurate information about beneficial ownership and this can be exchanged with international counterparts in an efficient manner.
Today, anonymous shell companies allow criminals and corrupt businesses and officials to hide money and evade law enforcement. Anonymous shell companies have been used to siphon off government revenues from the sale of natural resources in developing countries, while drug cartels have laundered millions of dollars through the United States using these vehicles.In total, at least $1tn is syphoned from developing countries each year with very few of those responsible ever found or held accountable. Global detection rates of illicit funds by law enforcement are as low as 1%, according to United Nation estimates. A World Bank review of big corruption cases over the last 30 years found that 70% of those cases involved the misuse of corporate entities, such as anonymous shell companies. Moreover the World Bank found that the US was the favorite destination for corrupt politicians from around the world to set up companies to move or hide dirty money.
There is a way to help stop the corrupt and criminal from getting away with these acts: governments should collect the identity of the real, living people who ultimately own and control companies and other legal entities. This would make it harder for criminals to hide money in places like the US and easier for law enforcement to track them down.
This week in Brisbane, Australia, the G20 leaders have a powerful opportunity to act on this critical issue. G20 leaders have already identified shedding light on corporate ownership as a priority. Now they need to take the next step and agree to beneficial ownership principles to guide their actions.G20 governments should collect the identity of the real, living people who ultimately own and control companies and other legal entities. This will build on the growing momentum for change.
In 2013, the G8 – in Lough Erne, in Northern Ireland – committed to “core principles that are fundamental to the transparency of ownership and control of companies and legal arrangements”, including making beneficial ownership information accessible to law enforcement, tax administrations and “other relevant authorities,” and UK and EU parliaments are currently considering related bills. The Financial Action Task Force in October released guidance recommending that basic information about beneficial owners be shared with “competent authorities” in a timely fashion, and – the same month – OECD and G20 countries endorsed a new standard on the automatic exchange of information, which requires access to beneficial ownership information, in Berlin.
Action on beneficial ownership transparency benefits us all: it increases the stability of the financial system, ensures countries can benefit from their own resources and enables law enforcement to track down the perpetrators of crime and corruption.
My colleagues on the B Team—Sir Richard Branson, Arianna Huffington, Guilherme Leal, Ngozi Okonjo-Iweala, Francois-Henri Pinault and Paul Polman—join me in calling on the G20 to act on beneficial ownership.As entrepreneurs—owners and leaders of successful corporations—we do not want the corporate form to be abused and called into disrepute. As global leaders, we see that corruption and money laundering are a constraint on economic growth that undermines investments in human capital and infrastructure.Business as usual shouldn’t include perverse uses of the corporate form for crime and corruption. G20 action on beneficial ownership would promote both clean business and good governance. G20 leadership on this issue is timely, necessary and welcome.
Signed, Richard Branson Arianna Huffington Mo Ibrahim Guilherme Leal Ngozi Okonjo-Iweala Francois-Henri Pinault Paul Polman
You can read the full Leaders’ Communique with all the outcomes from the G20 2014 Summit here…