Panelists R - L: Sol Krause (StAR Initiative), Daniel Nielson (University of Texas), Simon Bowers (Finance Uncovered) and James Cohen (Transparency International Canada) at the IACC in Washington DC, December 2022
Joint statement by the StAR Initiative, Transparency International Canada,
and Finance Uncovered
Signatures for Sale:
A Look Inside the Corporate Secrecy Industry
Our session at IACC 2022 shed light on questionable practices of the corporate secrecy industry and highlighted mechanisms designed to evade corporate transparency rules. In particular, nominees are a major but underappreciated point of vulnerability in efforts to increase corporate transparency. Measures to address misuse of nominees need to be a core part of policy efforts to improve transparency of corporate entities.
- Countries should step up AML regulation and supervision of corporate service providers, and crack down on frequently implicated enablers of corruption, money laundering, and kleptocracy by enforcing sanctions. This includes strengthening the regulation of nominee services, for example through transparency requirements, licensing requirements, or through a register of nominees.
- Beneficial ownership registries should develop mechanisms to detect undisclosed nominee relationships and adopt other verification checks using a risk-based approach.
- Registries should place greater emphasis on applying sanctions for false declarations of beneficial ownership to enforce compliance with beneficial ownership rules, while distinguishing between inadvertent and administrative errors and deliberate falsehoods.
- Countries should adopt anti-SLAPP laws and whistleblower protection laws to protect journalists and their sources and foster a healthy, competitive media environment for exposing corruption, kleptocracy, and their enablers.
- Governments and bar associations should clarify that the provision of company formation, administration and related corporate services by legal professionals is not covered by attorney-client privilege protections.
- Countries should use multiple policy objectives of beneficial ownership registries when considering an appropriate balance between rights to privacy and corporate transparency, including anti-money laundering, anti-corruption, anti-fraud, prevention of conflicts of interest, and business integrity.