LONDON, December 12 (IPS) – Authored by Executive Director, Financial Transparency Alliance, the European Court of Justice on November 22, 2022, issued a ruling that reversed much of the progress we have made. We have achieved in a decade in the fight against corruption, economic and natural resource crime, tax abuse and other forms of illicit finance around the world. In the judgment, the court declared null and void part of the European Union Anti-Money Laundering Directive allow the public to access registries of the company’s beneficial owners (i.e. the people who actually own or actually control them).
The financial secrecy surrounding the owners of the vessels is a key driver of IUU fishing as secrecy makes it harder to catch the real culprits of this illegal trade. In a report released by the Financial Transparency Alliance in October 2022, we found that of the top 10 ship operators reported to be engaged in this illegal activity, has a company based in Spain. while a total of 30 ships are flying the Italian flag, making it Europe’s highest jurisdiction for IUU fishing. In total, we find that 12.8% of all vessels engaged in IUU fishing are flagged by a European country.
The ECJ’s ruling makes it impossible for the public to further investigate these links. In Spain and Italy, the commitment to open the registry has been made in principle but has not yet been implemented. This decision removes any pressure to implement open beneficial title registration in the two countries most responsible for IUU fishing in the continent.
This is a welcome gift for the owners of IUU fishing vessels that regularly use complex company structure to hide their identity and evade punishment. Emphasizing this, in our investigation we found that individual shareholder data were only available for 16% of industrial and semi-industrial vessels engaged in IUU fishing.
But the ECJ’s ruling impact will be clearly felt beyond Europe’s borders. Most of the world’s IUU fishing takes place in Africa, which loses US$11.5 billion in illegal financial flows related to IUU fishing every year. A significant proportion of this illegal fish caught in Africa is caught in West Africa, with a loss of US$9.5 billion in this region alone, with much of the fish being lost by fleets of water. in addition to fishing there will move to Europe. In total, mainland Europe imports some Seafood worth $14 billion from the Southern Hemisphere each year, making it a key market for aquatic products.
Court decisions are based on a narrow interpretation of the beneficial title registry’s purpose, limited to combating money laundering and terrorist financing. Fishing-related crimes have not been recognized by the Financial Action Task Force (FATF), the global anti-money laundering body, as a ‘natural resource crime’, while related crimes to illegal logging and illegal wildlife trade (IWT) were included in their definitions. what constitutes money laundering. If this were upgraded by the FATF, we could declare most, if not all, IUU fishing offenses to be money laundering.
The ECJ’s decision is also based on a narrow interpretation of the ‘right to a private life’ as a fundamental civil right registered in the EU Charter of Fundamental Rights, which partly lays the groundwork. legislation for the EU. Worryingly, the court did not consider any evidence of the benefits of public access to beneficial ownership information in both combating money laundering and terrorist financing, let alone the risks. the risk that natural resource crimes pose to other rights, such as The right to a healthy environment is recognized by the United Nations General Assembly as a human right by 2022.
In the end, the real winners of this ruling are the thousands of companies engaged in IUU fishing and other environmental crimes around the world, and profiting from money laundering in the amount of billions of euros each. five. The ruling undermines collective action to make the money trail of these crimes easier to track, at a time when countries, especially in the Southern Hemisphere, are in dire need of money amid a crisis. cost of living and high inflation.
Reacting to the ruling, the Council of Europe signal that member states should ensure that any natural or juridical person demonstrating a legitimate interest has access to the information kept in the register of ownership of the interest, including in particular are journalists and civil society organizations as long as they can demonstrate a legitimate interest in combating money laundering and terrorist financing.
However, this is not enough as this will likely only apply to journalists and civic organizations in the same country as the registry, and the registration process often takes a long time. Additionally, one would need to know the company of interest before accessing any information, blocking the option of looking through public registries to detect risks and red flags.
The EU Parliament is expected to begin negotiations on a new anti-money laundering directive next spring. It must not allow the ECJ’s judgment to take effect, for the benefit of everyone.
IPS UN Office
© Inter Press Service (2022) — All rights reservedOrigin: Inter Press Service