Today (Tuesday 16 April), the UK Government will announce a
global call to action for greater transparency on company
ownership to tackle global illicit flows of money.
Transparency about who owns, controls, or benefits from companies
is a cornerstone of preventing and combatting corruption,
organised crime, and tax evasion.
The UK is leading the call to action with contributions of £2
million to trust funds managed by the World Bank and the
International Monetary Fund (IMF) to tackle corruption, money
laundering, and illicit finance. The work funded by this
contribution will support low-income countries to implement
registers of company ownership, building on existing work with
countries such as Nigeria and Kenya.
Attending the World Bank Spring Meetings in Washington D.C. this
week, Andrew Mitchell, the UK's Deputy Foreign Secretary and
Minister for Development and Africa, will announce the call to
action in his capacity as the UK's Governor to the World
Bank.
Every year, Africa loses an estimated almost $90 billion due to
the ease with which corrupt individuals can move money
transnationally through anonymous shell companies. This drains
important financial resources away from low-income countries and
weakens their ability to achieve economic stability and financial
independence.
Global financial corruption undermines progress towards the UN's
Sustainable Development Goals and tackling climate change, and
directly affects the UK's security and opportunities for
trade.
Greater transparency will enable low-income countries to stem the
flow of illicit finance, hold the corrupt to account, and enable
them to deliver the services and public investment necessary for
their long-term prosperity.
Deputy Foreign Secretary and Minister for Development and Africa
Andrew Mitchell said:
We must mobilise a global coalition of countries and
international organisations to drive greater transparency about
who really owns anonymous shell companies.
More and more transparency will mean fewer and fewer places for
dirty money to hide, ensuring low-income countries can channel
their resources into tackling urgent development issues, such as
climate change and boosting economic growth. This will ultimately
benefit us all.
The UK's support announced today forms part of wider work with
the World Bank and IMF to strengthen anti-corruption and illicit
finance measures in their policy advice, financial instruments,
and programmes. It also delivers on the UK's commitment in the
International Development White Paper to support low-income
countries in building their long-term resilience to corruption
and illicit finance risks.
Through the call to action, the UK aims to work with other
countries and international organisations to standardise
information on company ownership, making it easier to use, and to
open registers to journalists and civil society organisations
involved in exposing money laundering, terrorist financing, and
other illicit financial flows, and will help catalyse law
enforcement investigations and prevent corruption.
Background
- Over 70 countries currently have live registers of company
ownership, approximately 30 of which are public, including in the
UK.
- Over the next few months, the UK will consult other countries
to agree the commitments in the call to action. They will focus
on increasing access to company ownership information and
improving the quality of the information so it can be used
effectively.
- The UK is contributing £1 million to the World Bank Group's
Governance & Institutions Umbrella Trust Fund and £1 million
to the International Monetary Fund's Anti-Money Laundering &
Combatting the Financing of Terrorism Thematic Trust Fund.
- According to the United Nation's Conference on Trade and
Development (UNCTAD), capital flight from Africa amounted to
roughly $88.6 billion per year on average in 2013–2015. Source:
Economic Development in Africa Report 2020: Tackling Illicit
Financial Flows for Sustainable Development in Africa, available
at https://unctad.org/system/files/official-document/aldcafrica2020_en.pdf