One of the main loopholes in efforts to fight money laundering is that some jurisdictions do not require those forming a company to report who ultimately controls it. Because of their lax corporate registration rules, these “secrecy jurisdictions” allow a person to set up a secret company and disguise the true beneficial owner.
A "beneficial owner" is the natural person who ultimately owns, controls, or benefits (directly or indirectly) from a company or trust fund and the income it generates. Whether he or she is the legal owner is irrelevant, as beneficial ownership refers to substantive control, not to formal ownership. A "nominee," on the other hand, is one who may be registered as a legal owner without any benefits. Nominees obscure the real company structure and owners. Professional nominees are paid a fee for their services but otherwise have no interest in the transactions. Nominees can also be family members or friends.
Because secrecy jurisdictions allow for the formulation of opaque corporate ownership structures, they represent a valuable method used by the corrupt to hide and stow away their stolen funds.
What are the benefits (either individually or collectively) of monetary secrecy in these or in any jurisdiction? More importantly, does the concept of financial transparency represent the wave of the future, or is it slowly becoming a thing of the past?
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