As European Union and African Union representatives meet in Brussels on Monday 28 November 2022 to review progress following the EU-AU Summit in February, 34 African and European civil society organisations have raised concerns about threats to ground-breaking EU transparency measures, which could undermine all that has been put in place to prevent and combat the problem of illicit financial flows out of Africa.
The 34 organisations state:
“Illicit financial flows rob African nations of almost US$89 billion each year. Anonymous companies are often used as the get-away vehicles of the corrupt, helping syphon these funds out of Africa – often to Europe – denying countries revenues that could be used to boost economies, and fund health and education systems.
The EU has been a trailblazer in cracking down on the use of these phantom firms. The requirement under the 2018 Anti-Money Laundering Directive for EU countries to set up and make public registers of beneficial owners of companies was a major step forward, helping shine a light on this murky world. A 22 November 2022 ruling by the European Court of Justice invalidating these rules and so denying public access to beneficial ownership information is therefore extremely concerning.
Given the EU’s position as a global leader on beneficial ownership transparency, we fear that the ruling risks could have a chilling effect on other countries that are deliberating whether or not to open up their registers, or are currently legislating for public registers. The ruling will also have a direct impact on the ability of civil society, investigative journalists and even competent authorities in other parts of the world to access EU company ownership information, something which is critical to identifying and recovering stolen assets.