The recent revelations in the Panama and Pandora papers, as well as several smaller leaks, have exposed how anonymous shell companies and the use of secrecy jurisdictions can shield wealth amounting to billions of U.S. dollars and facilitate criminal activity. The scandals exposed a system that allowed for the shifting of taxable wealth to shell companies in low-tax jurisdictions, as well as the concealment of legitimate and illegitimate assets from authorities.
This brief draws on a review of the practice of obtaining beneficial ownership information in the United States, the United Kingdom, and several countries in Africa and South Asia. It examines the existing approaches to collecting beneficial ownership information and the related challenges that practitioners experience. It concludes with recommendations for policymakers and regulators on strengthening the collection and maintenance of beneficial ownership information as a primary tool for the detection and prevention of money laundering, tax evasion, corruption, fraud, and other criminal activity.
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