To shed light on the true owners of letterbox companies, the European Parliament on April 19 voted through an agreement reached with the European Council in December. Under the new rules, any citizen will, in future, be able to access data about the beneficial owners of firms operating in the EU.
Voted by 574 votes to 13 votes, with 60 abstentions, the agreement also proposes closer regulation for virtual currencies, like Bitcoin, to prevent them being used for money laundering and terrorism financing.
According to a European Parliament press release, this agreement represents the fifth and latest update to the EU’s Anti-money laundering Directive and is partly a response to the terrorist attacks of 2015 and 2016 in Paris and Brussels, as well as the Panama Papers leaks.
“With this new legislation, we introduce tougher measures, widening the duty of financial entities to undertake customer due diligence,” said Judith Sargentini (Verts/ALE, NL), co-rapporteur. “This will shine a light on those who hide behind companies and trusts and keep our financial systems clean. These rules will also be of enormous benefit to developing countries and their fight against illicit outflows of money which is desperately needed for investment in their own societies.”
In turn, Krisjanis Karins (EPP, LV), co-rapporteur noted that criminal behaviour hasn’t changed. “Criminals use anonymity to launder their illicit proceeds or finance terrorism. This legislation helps address the threats to our citizens and the financial sector by allowing greater access to the information about the people behind firms and by tightening rules regulating virtual currencies and anonymous prepaid cards.”
Kariņs, who negotiated the new law on behalf of the European Parliament, also noted that the threat of terrorism and financial innovations such as Bitcoin require updates to current laws. “These measures will make Europe safer.”
The Progressive Alliance of Socialists and Democrats (S&D) Group in the European backed the reforms. MEPs Ana Gomes and Peter Simon, who were responsible for the revision of the anti-money laundering directive for the S&D Group, said: “Winning the fight against terrorist groups and organised criminals is only possible if we win the fight for financial transparency. As we saw in the revelations in the Panama Papers, it is not just celebrities and multinational companies that are using the shady parts of the global financial system to hide their money.”
