IMAGE: ISTOCK
COMPANY REGISTRATIONS
fraud and address tax compliance risks among wealthy taxpayers, with Chancellor Jeremy Hunt confirming in the Autumn Statement 2022 that £79m would be invested in HMRC to allocate additional staff to the task. Efforts to strengthen the system are
laudable, but Max Heywood, head of public policy at financial crime risk management platform Elucidate, based in Germany, believes that simply having a robust register is insufficient. A ‘multi- pronged approach’ that includes financial intelligence units and crime-fighting bodies is also needed, he says, because “if one part of the system isn’t coordinated – it could be banks or lawyers even – then there’s a gap that criminals can get through”. Max points out that going back
through all the existing data on Companies House and ascertaining its veracity is a huge task requiring significant resources. This is a major challenge for long-established legacy systems, and why countries with newly established frameworks often have more robust company registration systems. Ukraine is a global leader in this area,
says Max, largely down to having built its register from scratch within the past decade, meaning it was entirely digital from the beginning. In 2015, Ukraine was the first country
in the world to launch a public register of the beneficial owners of its registered corporate entities. In 2017 it became the first nation to integrate its national central register of beneficial ownership with the advocacy group Open Ownership, which is funded by governments, institutions, foundations, and the private sector. Conversely, countries like Germany
have an arguably complex system, with corporate registers managed at the federal state level, but with the Handelsregister (commercial register) acting as a single portal for access to sub-national registers. The Transparenzregister is a register of
beneficial ownership. However, it is unclear what impact the Court of Justice of the European Union’s (CJEU) ruling on beneficial ownership will have for public access to this data. The CJEU has angered transparency campaigners by invalidating a provision of the fifth EU anti-money laundering (AML) directive that “guaranteed public access to information on companies’ real owners”, according to an article by anti-corruption organisation Transparency International.
CISI.ORG/REVIEW
Obvious flaws Company registration systems where there are few checks, or even none, provide an unobstructed platform from which money laundering can flourish. The UK, for example, has been given
short shrift by Transparency International, which, in its 2017 Hiding in plain sight report, identifies 766 UK companies that were used in 52 global corruption and money laundering cases. Graham Barrow, a banking compliance
expert and now director at The Dark Money Files – an educational project that includes a blog, podcasts, and events – writes extensively on money laundering and the scale to which it appears visible on Companies House. In research conducted by Barrow, he
generated a sample of limited liability partnerships (LLPs) and limited partnerships (LPs) by searching
// A MULTI- PRONGED APPROACH IS NEEDED //
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