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Andres Knobel ■ Dear European Court of Justice, you were played

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Pawn chess piece standing among fallen chess pieces

Excerpt from my article published today in Le Monde and OCCRP on the perverse decision by the European Court of Justice to strike down beneficial ownership transparency:

“On November 22, 2022, the European Court of Justice reversed a decade of progress against financial secrecy, to the cheers of sanctioned oligarchs and tax dodgers all around the world. 

“In a perverse decision that it claims to be founded in human rights, the court declared invalid the public’s ability to access information on companies’ beneficial owners (the people who own or control them). 

“With leading European tax havens from Ireland to the Netherlands having already returned the cloak of anonymity to their company registers, EU policymakers must deliver an urgent response to this ruling.

“The court’s decision rests on the view that allowing the true owners of companies to be publicly known constitutes a serious interference with the fundamental rights to respect for private life and to the protection of personal data enshrined in the Charter of Fundamental Rights of the European Union. You might guess from this wording that the the decision was a major human rights victory that would be celebrated by civil society organizations and the public at large.

“You couldn’t be more wrong.”

Read the full article in English in the OCCRP or in French in Le Monde.

Read also coverage from the International Consortium of Investigative Journalists on the case here.

A beneficial owner is the real person, made of flesh and blood, who ultimately owns, controls or benefits from a company or legal vehicle, even when the company legally belongs, on paper, to another person or entity, like an accountant or a shell company.

Companies are typically required to register the identities of their legal owners (which can be real people or other companies), but not necessarily their beneficial owners. For most businesses, a company’s legal owner and beneficial owner are the same individuals. It’s usually only those with the means and incentive to acquire offshore shell companies, accountants and lawyers to hide behind, that can be beneficial owners but not appear as legal owners on paper.

By requiring corporations and offshore entities to publicly register their beneficial owners just like they do their legal owners, public beneficial ownership laws can prevent their owners from escaping the rule of law, which can mean preventing billionaires from evading tax as well as preventing sanctioned oligarchs, organised crime and human traffickers from laundering money and financing illegal activity.

Read more here.

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