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Hidden villains - An examination of a beneficial ownership register as an anti-corruption measure

Svensson, Elin LU (2017) JURM02 20172
Department of Law
Faculty of Law
Abstract
Due to recent corruption scandals such as the Panama Papers, beneficial ownership has become a hot topic on the global agenda. Government officials, rich businessmen and criminals worldwide use corporate vehicles and mechanisms in order to hide the real owner and can thereby launder assets stemming from financial crimes. In relation to corruption, this is a commonly used method in order to veil the proceeds of grand corruption and for example enable the transfer of assets stemming from bribes.

This thesis assesses whether such a beneficial ownership register would be an effective anti-corruption tool and do it through examining two major frameworks; Financial Action Task Force Recommendations which is the international anti-money... (More)
Due to recent corruption scandals such as the Panama Papers, beneficial ownership has become a hot topic on the global agenda. Government officials, rich businessmen and criminals worldwide use corporate vehicles and mechanisms in order to hide the real owner and can thereby launder assets stemming from financial crimes. In relation to corruption, this is a commonly used method in order to veil the proceeds of grand corruption and for example enable the transfer of assets stemming from bribes.

This thesis assesses whether such a beneficial ownership register would be an effective anti-corruption tool and do it through examining two major frameworks; Financial Action Task Force Recommendations which is the international anti-money laundering standard, and EU’s 4th Anti-money laundering Directive, which implements the Financial Action Task Force Recommendations through a requirement that its member states shall establish national central registers of beneficial ownership information. The examination of whether a beneficial ownership register would be an effective anti-corruption tool is further conducted from two anti-corruption theories; the Principal-agent-client theory and the Collective action theory, which provide different views on why corruption occur and how it should be tackled.

The thesis concludes that the regulations on beneficial ownership transparency contain several gaps in relation to certain corporate vehicles and mechanisms that are commonly used when laundering the proceeds of corruption. This risks making the registers, when implemented to national contexts, non-reliable and non-accessible. The application of the anti- corruption theories on such gaps shows that the reliability and accessibility are strongly connected with the potential of beneficial ownership registers since it may affect factors such as discretion and accountability of corrupt actors and also the possibility to frame corruption as the human rights issue which it really is.Due to recent corruption scandals such as the Panama Papers, beneficial ownership has become a hot topic on the global agenda. Government officials, rich businessmen and criminals worldwide use corporate vehicles and mechanisms in order to hide the real owner and can thereby launder assets stemming from financial crimes. In relation to corruption, this is a commonly used method in order to veil the proceeds of grand corruption and for example enable the transfer of assets stemming from bribes.

This thesis assesses whether such a beneficial ownership register would be an effective anti-corruption tool and do it through examining two major frameworks; Financial Action Task Force Recommendations which is the international anti-money laundering standard, and EU’s 4th Anti-money laundering Directive, which implements the Financial Action Task Force Recommendations through a requirement that its member states shall establish national central registers of beneficial ownership information. The examination of whether a beneficial ownership register would be an effective anti-corruption tool is further conducted from two anti-corruption theories; the Principal-agent-client theory and the Collective action theory, which provide different views on why corruption occur and how it should be tackled.

The thesis concludes that the regulations on beneficial ownership transparency contain several gaps in relation to certain corporate vehicles and mechanisms that are commonly used when laundering the proceeds of corruption. This risks making the registers, when implemented to national contexts, non-reliable and non-accessible. The application of the anti- corruption theories on such gaps shows that the reliability and accessibility are strongly connected with the potential of beneficial ownership registers since it may affect factors such as discretion and accountability of corrupt actors and also the possibility to frame corruption as the human rights issue which it really is. (Less)
Abstract (Swedish)
Till följd av de senaste årens internationella korruptionsskandaler, som exempelvis avslöjats genom Panamadokumenten, har det Internationella samfundets fokus på transparens kring företags verkliga huvudmän ökat. Användandet av olika typer av företagsstrukturer och mekanismer med syftet att gömma den verkliga huvudmannen är vanligt förekommande bland korrupta politiker, kriminella och affärsmän. Genom att dölja vem som är den verklige huvudmannen är det således möjligt att tvätta tillgångar som härstammar från ekonomiska brott. I förhållande till korruption är detta en vanligt förekommande metod för att exempelvis möjliggöra muttransaktioner.

Denna uppsats undersöker huruvida ett register över verkliga huvudmän kan fungera som ett... (More)
Till följd av de senaste årens internationella korruptionsskandaler, som exempelvis avslöjats genom Panamadokumenten, har det Internationella samfundets fokus på transparens kring företags verkliga huvudmän ökat. Användandet av olika typer av företagsstrukturer och mekanismer med syftet att gömma den verkliga huvudmannen är vanligt förekommande bland korrupta politiker, kriminella och affärsmän. Genom att dölja vem som är den verklige huvudmannen är det således möjligt att tvätta tillgångar som härstammar från ekonomiska brott. I förhållande till korruption är detta en vanligt förekommande metod för att exempelvis möjliggöra muttransaktioner.

Denna uppsats undersöker huruvida ett register över verkliga huvudmän kan fungera som ett effektivt anti-korruptionsmedel. För att göra detta undersöks Financial Action Task Force Recommendations vilket är den globala standarden för åtgärder mot penningtvätt. Vidare undersöks EUs fjärde penningtvättsdirektiv som implementerar Financial Action Task Force Recommendations, bland annat genom att införa nationella centrala register över verkliga huvudmän. Två anti-korruptionsmetoder; Principal-agent-client teorin, samt teorin om Kollektivt handlande, används i uppsatsen för att bedöma huruvida ett register skulle vara ett effektivt anti-korruptionsverktyg.

I uppsatsen konstateras att regelverken innehåller flera luckor som leder till att vissa företagsstrukturer och mekanismer, som är vanliga förekommande medel vid tvättning av sådan avkastning som härstammar från korruption, inte täcks. Detta riskerar bland annat att också de nationellt implementerade register över verkliga huvudmän kan komma att innehålla luckor, både vad gäller pålitligheten av informationen om den verklige huvudmannen som registreras, samt tillgången till informationen. Tillämpningen av de två anti- korruptionsteorierna visar vidare på att sådana brister vad gäller pålitlighet av och tillgång till informationen om verkliga huvudmän, korrelerar med faktorer som den korrupte agentens diskretion och ansvarsskyldighet. Vidare påverkas möjligheten att utforma kampen mot korruption som den publika angelägenhet den är, det vill säga starkt relaterad till mänskliga rättigheter och förverkligandet av dessa. (Less)
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author
Svensson, Elin LU
supervisor
organization
course
JURM02 20172
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
Public International Law, Corruption, Beneficial Ownership
language
English
id
8929965
date added to LUP
2018-01-25 08:25:18
date last changed
2018-01-25 08:25:18
@misc{8929965,
  abstract     = {Due to recent corruption scandals such as the Panama Papers, beneficial ownership has become a hot topic on the global agenda. Government officials, rich businessmen and criminals worldwide use corporate vehicles and mechanisms in order to hide the real owner and can thereby launder assets stemming from financial crimes. In relation to corruption, this is a commonly used method in order to veil the proceeds of grand corruption and for example enable the transfer of assets stemming from bribes.

This thesis assesses whether such a beneficial ownership register would be an effective anti-corruption tool and do it through examining two major frameworks; Financial Action Task Force Recommendations which is the international anti-money laundering standard, and EU’s 4th Anti-money laundering Directive, which implements the Financial Action Task Force Recommendations through a requirement that its member states shall establish national central registers of beneficial ownership information. The examination of whether a beneficial ownership register would be an effective anti-corruption tool is further conducted from two anti-corruption theories; the Principal-agent-client theory and the Collective action theory, which provide different views on why corruption occur and how it should be tackled.

The thesis concludes that the regulations on beneficial ownership transparency contain several gaps in relation to certain corporate vehicles and mechanisms that are commonly used when laundering the proceeds of corruption. This risks making the registers, when implemented to national contexts, non-reliable and non-accessible. The application of the anti- corruption theories on such gaps shows that the reliability and accessibility are strongly connected with the potential of beneficial ownership registers since it may affect factors such as discretion and accountability of corrupt actors and also the possibility to frame corruption as the human rights issue which it really is.Due to recent corruption scandals such as the Panama Papers, beneficial ownership has become a hot topic on the global agenda. Government officials, rich businessmen and criminals worldwide use corporate vehicles and mechanisms in order to hide the real owner and can thereby launder assets stemming from financial crimes. In relation to corruption, this is a commonly used method in order to veil the proceeds of grand corruption and for example enable the transfer of assets stemming from bribes.

This thesis assesses whether such a beneficial ownership register would be an effective anti-corruption tool and do it through examining two major frameworks; Financial Action Task Force Recommendations which is the international anti-money laundering standard, and EU’s 4th Anti-money laundering Directive, which implements the Financial Action Task Force Recommendations through a requirement that its member states shall establish national central registers of beneficial ownership information. The examination of whether a beneficial ownership register would be an effective anti-corruption tool is further conducted from two anti-corruption theories; the Principal-agent-client theory and the Collective action theory, which provide different views on why corruption occur and how it should be tackled.

The thesis concludes that the regulations on beneficial ownership transparency contain several gaps in relation to certain corporate vehicles and mechanisms that are commonly used when laundering the proceeds of corruption. This risks making the registers, when implemented to national contexts, non-reliable and non-accessible. The application of the anti- corruption theories on such gaps shows that the reliability and accessibility are strongly connected with the potential of beneficial ownership registers since it may affect factors such as discretion and accountability of corrupt actors and also the possibility to frame corruption as the human rights issue which it really is.},
  author       = {Svensson, Elin},
  keyword      = {Public International Law,Corruption,Beneficial Ownership},
  language     = {eng},
  note         = {Student Paper},
  title        = {Hidden villains - An examination of a beneficial ownership register as an anti-corruption measure},
  year         = {2017},
}