New investigations based on leaked documents show the alleged role of a UK-based company formation agent in setting up and managing firms linked to fraud and criminal activity in multiple countries. The case is another example of the need for effective and implemented regulation of corporate service providers, Transparency International said. Countries that rely on such firms for identifying company owners and vetting their sources of funds are at greater risk of money laundering and corruption, the anti-corruption organisation added.

Maira Martini, Research and Policy Expert at Transparency International, said: “Company formation agents have been at the heart of scandals like the Panama Papers and Paradise Papers. This investigation appears to give us another example of how some corporate service providers have allegedly facilitated money laundering and criminal activity. Formation agents need to face tough consequences when they fail to conduct proper due diligence on their clients.

Yet some countries have actually chosen to rely almost entirely on such agents to identify the real people behind companies and vet their funds. This is like the fox guarding the hen house. Far better would be public registers of company ownership, so that companies set up by dodgy firms can be identified and scrutinised by law enforcement, journalists and civil society.”



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