Unveiling the Mask

Global Witness is an organization that seeks to put an end to the corruption in poor countries that result in the destruction of natural resources and lives. The group investigates many companies and governments to unearth the illegal practices they take in order to profit. And they don’t stop there, the organization also provides guidelines for how the countries can be more effective at discovering illegal activity. The following guidelines are:

  1. Global Witness believes that in order for banks to conduct due diligence to effectively prevent dirty money flowing through their accounts via anonymous companies, and for law enforcement and others to be able to determine the real owners of companies that may be involved in corrupt or criminal activity, they must have accurate, complete and timely information about those companies’ owners.
  2. The definition of a company’s beneficial owner or owners must include a robust definition that includes both the concept of ‘ownership’ as well as ‘control’ to guard against bad actors using proxies to conduct business on their behalf. The threshold for disclosure ought to be low enough to cover most business activity and shouldn’t provide an easy blueprint for money launderers to evade new requirements.
  3. The information should be collected at the right times — both when the company is first formed and when the ownership changes.
  4. Lastly, the information should be accessible to those who need it most; at a minimum there needs to be a clear mechanism for law enforcement to gain access to this information in the appropriate course of an investigation.

These regulations seem relatively simple, but the enforcement may be the bigger issue. The implementation of a new system takes time before one can reap the rewards. The system must first go through years of trial and error before it becomes more familiar to the people. Also, the adaptation to these rules could result in discovering ways to trick the system.

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