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CURRENT STATUS OF THE FIGHT AGAINST TAX HAVENS IN EUROPE
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to report information to their tax authorities –
specifically requires financial institutions to iden-
tify the people who control any intermediate ve-
hicles (companies, trusts etc.), in accordance with
the procedures of “due diligence”. However, to
guarantee genuine transparency, the existing ob-
ligations of banks and other professionals in this
field must be strengthened with the implementa-
tion of centralized registers of beneficial owners.
This is reflected in the 4th Anti Money-Laundering
Directive EU 2015/849 (IV AMLD). It is now time
to extend the same solution to the sphere of tax
evasion.
The availability of centralized registers of the
beneficial owners of companies and trusts
would, for example, mean that, in the case of
an individual holding accounts with several dif-
ferent banks, the institutions would not have to
replicate their control processes to check benefi-
cial ownership. At the same time, banks would
no longer be able to use the impossibility of
identifying the beneficial owner behind a trust
or a company as an excuse for having accepted
a new client.
Therefore, when evaluating compliance with
this criterion, the EU should consider whether
third-country jurisdictions have implemented a
centralized register of beneficial owners of trusts
and companies, in line with the approach adop-
ted in the IV AMLD.
But the requirement should not stop there.
These registers should be publicly accessible, as
set out in the proposed reform to IV AMLD pre-
sented by the Commission following publication
of the Panama papers. This proposal suppresses
– in the majority of cases – the current require-
ment that only individuals who can demonstrate
a “legitimate interest” may have access to the
information in the register of beneficial owners.
The notion of “legitimate interest” is problematic
because it is very vague, and its definition thus
becomes a matter for each individual Member
State. This raises the danger that restrictions on
access to registers may vary widely from one coun-
try to another, failing to guarantee a level playing
field in this area. As a result, the requirement to
demonstrate a legitimate interest should be elimi-
nated, enabling unconditional public access to the
content of registers of beneficial owners.
The principle of unrestricted access is reflect-
ed in the Commission proposal, with the excep-
tion of “non-commercial trusts”, for which it is
proposed that the legitimate interest require-
ment should be retained. However, this excep-
tion strikes us as unjustified, particularly given
the fact that so-called “family trusts” are often
used for purposes of tax evasion and money-
laundering.
A genuinely public register of beneficial
owners would mean that more people would
be able to scrutinize the information provided
by financial agents. This, in itself, would act to
dissuade opaque or corrupt behaviour. It would
also give investors more reliable information on
which to base their decisions, and would allow
a more accurate assessment of the potential tax
risks of entering into relationships with certain
organizations. Companies, for their part, would
have important additional information, which
would give them a better understanding of their
business partners and sub-contractors.
Finally, public records would enable civil soci-
ety, investigative journalists and others to exert
more social pressure on the opaque behaviour
of certain economic operators. For all these rea-
sons, the completely unrestricted publication of
information about beneficial owners in a cen-
tralized register of trusts and companies should
constitute the standard of transparency required
to prevent the inclusion of a country or territory
in the European list of tax havens.