Corporate disclosure is cost-effective means of fighting money laundering, UK anti-corruption leader says

29 May 2019 00:00

The US should join a global effort to make significant ownership of corporations transparent, the UK Prime Minister's Anti-Corruption Champion said, asserting that beneficial ownership registries discourage money laundering and have cost benefits for businesses.

John Penrose, a Conservative Member of Parliament, said that the UK's beneficial ownership registry has "cost less than it does to build a few kilometers of road." The registry also has lowered the cost for financial institutions seeking to comply with know-your-customer rules and for businesses performing due diligence on potential suppliers, Penrose said at a DC presentation held by the US Helsinki Commission.

Penrose said that the UK registry has improved British law enforcement's ability to follow the money trail left by criminals, corrupt foreign leaders and malign foreign operatives. Since June 2016, the UK Companies House has required firms to disclose to its "People with Significant Control" registry the name, month and year of birth, and nationality of people with more than 25 percent interest in a company.

Penrose said that more countries, including the US, should require disclosure of ownership because law enforcement investigations hit a standstill when they encounter assets held in entities owned anonymously. He made his remarks in the Capitol Hill hearing room of the House Financial Services Committee, which is considering legislation to establish a US corporate ownership database.

"If that is available around the world we can make sure there is an audit trail and there is nowhere to hide," he said.

Proposed US legislation would require owners of registered corporations to disclose their identities to the Financial Crimes Enforcement Network. Unlike the UK system, that database would not be available to the public, but would be available to law enforcement and financial institutions.

Penrose told MLex that tomorrow at the Open Government Partnership Summit in Ottawa, he and colleagues will formally call on national governments in attendance to join a campaign to establish public registries. He said that he expects countries in Latin America and Africa that have had serious corruption problems and recent changes in leadership to take interest in the campaign.

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