Corruption hunters call on the G8 to tackle shell companies and money laundering

A group of public prosecutors and corruption hunters have written to G8 leaders calling on them to tackle shell companies and money laundering. For more information see Global Witness' brieifing on Anonymous Companies. 

Dear G8 leaders, 

As a group of individuals who have worked to expose and fight corruption, we have witnessed firsthand the detrimental effects of state looting by unscrupulous politicians and officials. It hinders development in some of the poorest countries in the world by depriving governments of revenues desperately needed to combat poverty.

Grand corruption would not be possible without the help of the global financial system – in particular, banks that accept corrupt assets and secrecy rules that allow money launderers to disguise their activity.

We welcome the strong statements from Prime Minister Cameron that at the upcoming summit in Northern Ireland, G8 leaders will discuss how they can tackle this problem.

We believe that two things are necessary.

Firstly, G8 countries must commit to take action to prevent anonymous companies from being used to hide criminal activity. Corrupt politicians, tax evaders, and organised criminals all use complex webs of shell companies to hide and launder stolen money. We believe that part of the solution is for governments to require existing company registers to collect information on the ultimate owners of all companies. To have the most impact, this information should be in the public domain. This would help law enforcement chase down money launderers, but it will also enable citizens, journalists and civil society to hold companies to account for their actions. It is also important that this should be extended to cover G8 members’ offshore territories. 

 Secondly, governments need to send a strong signal to their financial institutions that it is unacceptable to do business with corrupt politicians. Banks that are found to breach anti-money laundering rules should face strong, dissuasive penalties. These should also be applied to senior executives who turn a blind eye to dirty money passing through their banks or those who have neglected their duties to ensure that their organisations have the required systems in place to prevent money laundering.

 Tackling the role that the financial system plays in facilitating corruption will help to ensure that our countries have the resources needed for sustainable, long-term development.

 Yours sincerely,

Jack A. Blum, Esq.

Chair, Tax Justice Network USA, Former Chair UN Experts Group on Asset Recovery

William John Downer

Member, Corruption Hunter Network, South Africa