MEPs vote for public registers on company ownership Campaigners say public registers would help developing countries.

The European Parliament today (11 March) backed new rules that would create public registers listing online the beneficial owners that stand behind all European Union companies and trusts.

The vote was hailed by campaigners. “The current system has bred a vast network of anonymous shell companies, which are used to funnel money that’s been gained through illegal practices, or embezzled from a government’s coffers,” said Koen Roovers, European Union adviser for the Financial Transparency Coalition. A spokesperson for Eurodad, a non-governmental organisation focusing on debt and development, said that the MEPs’ proposal would make it harder for foreign leaders, such as Viktor Yanukovych, the recently ousted Ukrainian president, to use European companies to hide ill-gotten assets.

Judith Sargentini, a Dutch Green MEP, who is one of two MEPs leading the European Parliament's response to the proposal, introduced the amendment on public registers into the European Commission's proposal, which dates from February 2012. MEPs’ first reading position was backed by 653 MEPs and opposed by 30.

Members of the public seeking to consult the database would be required to register online. This is less onerous than requiring them to show that they have an interest in consulting the information, an option that was long preferred by Krišjanis Karinš, a centre-right Latvian MEP and the other lead MEP on the Parliament's response to the proposal.

Member states have yet to agree their position on the proposal. 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, whereas the United Kingdom and France support it. But David Cameron, the UK's prime minister, has publicly made the case for such registers, 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 proposal would also update existing rules to combat money laundering that date back from 2005, extending the rules to the gambling sector and requiring financial institutions to exert greater scrutiny of cash payments of €7,500 or above, down from the previous threshold of €15,000.

An estimated €600 billion is laundered worldwide each year to fund terrorist or criminal activities or to evade taxes.