MEPs will vote on Thursday (22 January) on creating publicly-available registers listing the beneficial owners of companies and trusts, in a move that campaigners say would constitute a significant blow against criminals and tax-evaders, reports European Voice.
Although MEPs are expected to back an amendment that would introduce the centralised registers, the vote on whether to make these available to the wider public hangs in the balance.
Opposition to public registers comes predominantly from the centre-right European People's Party. Krišja¯nis Karin¸š, the centre-right Latvian MEP who is one of the authors of the European Parliament's response to the proposal, argued that making the register public would breach privacy rules.
The proposal has the support of Judith Sargentini, the Dutch Green MEP co-authoring the Parliament response, as well as influential MEPs such as Sharon Bowles and Graham Watson, both British liberals, and Ana Gomes, a centre-left Portuguese MEP. They argue that the more transparent the system, the more difficult for crooks to hide money.
A number of member states, including Germany, Denmark, the Netherlands, Luxembourg, Estonia and Poland, are opposed to the idea of mandatory central registers of beneficial ownership, arguing that there are other equally effective means of achieving greater transparency.
The Commission's proposal dates back to February 2012. It advocated only tightening existing rules on money-laundering, imposing extra requirements on gambling companies and requiring all companies to hold information on their beneficial owners.
But David Cameron, the UK's prime minister, has publicly made the case for a mandatory public register, mirroring reforms planned in the UK. However Cameron does not want the rules applied to trusts, a legal entity peculiar to common law jurisdictions that provide a legal framework for one person to hold property on behalf of another.
The UK argues that there are important differences between trusts and companies, with owners of the latter receiving greater protection under law. Yet trusts – originally created to preserve the property of 13th-century crusaders for their next of kin – and shell companies are common to many complex tax-avoidance and money-laundering schemes, argue some campaigners.
To allay such concerns the UK has offered to exchange information on trust ownership with member state tax authorities on request.