Complex networks of companies created to disguise the ultimate beneficiaries of bribery and corruption were central to two of the most high-profile corruption scandals in recent years: bribery relating to officials of football’s world governing body, FIFA, and alleged kickbacks involving the Brazilian politicians and the country’s energy giant Petrobras. Not only that, but of the 11.5 million files that spilled out of the law firm Mossack Fonseca’s so-called the Panama Papers, most had some element of disguised beneficiaries. As a result, there has been a push towards greater transparency. According to a new white paper from LexisNexis—the Hidden World of Beneficial Ownership—over 100 jurisdictions have committed to implementing automatic information exchange, including well-known offshore locales like the British Virgin Islands, Cayman Islands and Panama. In addition, France, Germany, Italy, Spain and the U.K. have committed to participating in a unified beneficial ownership register and are calling on the rest of the G20 nations to follow suit.
The Financial Action Task Force (FATF), an intergovernmental body established in 1989 by the G7 group of major economies, has defined ‘beneficial owner’ as: “The natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.”
