Last week, British NGO Global Witness published Grave Secrecy, a report on how U.K. registered companies were allegedly used to launder the profits of corruption. Hundreds of millions of dollars passed through the corporate accounts of dozens of shell companies that held bank accounts at Asia Universal Bank (AUB), the largest bank in Kyrgyzstan. Although the report is based on one concrete case of alleged corruption and money laundering in that country, its relevance goes beyond that single example.
It is just one illustration of how money launderers and those involved in large-scale corruption use companies to hold criminal assets whilst ensuring that information on the control of those companies is virtually inaccessible. The essence of those schemes is to parcel out different bits of information on the company to different jurisdictions from which such information can only be obtained with difficulty (so-called secrecy jurisdictions). Indeed, how does one find relevant information on a U.K. company owned by a company registered in the British Virgin Islands with a company secretary in the Marshall Islands and a director in Panama? Criminal creativity knows no bounds.