Naomi Fowler ■ Good news from Slovakia: light cast onto shell companies
Second time lucky? About a year ago in Slovakia some opposition politicians pushed hard for a promising law to shed light onto anonymous ownership through shell companies. The Tax Justice Network supported their efforts by writing a letter to the Prime Minster at the time. Despite widespread public anger about corrupt practices, the law was blocked by the legislature. Now, after a second attempt the law has been passed, pretty much in its original form. This is great news.
An assistant to an opposition Member of the Slovak Parliament now takes up the story:
“Adoption of the law was consensual across the parliament – it was a huge success of the Justice Minister. She was open to amendments from opposition legislators. NGOs closely followed the process and their comments were taken seriously. The law passed on October 25th, 2016 and it came into effect on January 1st 2017. During the final vote in the Slovak parliament, no MP was against it, 12 were not present and 17 MPs did not vote. 121 out of 150 legislators voted for the law. You can read about the vote here (in Slovak).
What is truly important are that there are now palpable consequences for shell companies.Some notorious Slovak tycoons that were previously hidden behind foreign structures (and the public could only guess who owned them) actually admitted in the public register that they are beneficial owners of these companies. One case of particular interest is of company Vahostav that builds most of Slovakia’s highways and public buildings.Then we waited to see whether the Žilina court would take actual measures against shell companies. A couple of days ago, the court put a reasonably high fine (50,000 euros) on a company InterMedical that had Cypriot citizens registered as its beneficial owners. It is a notorious company which seems to be connected with many murky trade involved in Slovak healthcare. That fine was reduced today to 10,000 euros. Nevertheless, the good news is that the court in Žilina is not afraid to take measures against these companies and has been empowered by this new legislation.I currently work for an opposition MP and I have no interest in helping the government. I just want to give respect where respect is due. It really does seem that this new anti-shell law is not toothless and I can be proud of my country at least once.”
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The Tax Justice Network’s response to the open consultation on FATF Guidance on Recommendation 25 on beneficial ownership transparency for legal arrangements
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14 November 2023