Nigeria: $89bn Illicit Funds Taken Out Annually Through Anonymous Companies

Anonymous companies in Europe have been helping corrupt individuals to rob African nations of nearly $89 billion annually through illicit financial flows as civil organisations urged European Commission(EU) to open up beneficial ownership registers to the public.

This is as 32 African and European civil society organisations have raised concerns about threats to ground-breaking EU transparency measures which could impact the much that has been achieved to put in place measures to prevent and to combat the problem of illicit financial flows out of Africa.

The Centre for Fiscal Transparency and Integrity Watch organisations, in a statement yesterday, stated that “Illicit financial flows rob African nations of almost US$89 billion each year. Anonymous companies are often used as the get-away vehicles of the corrupt, helping syphon these funds out of Africa – often to Europe – denying countries revenues that could be used to boost economies, and fund health and education systems.

“The EU has been a trail-blazer in cracking down on the use of these phantom firms. The requirement under the 2018 Anti-Money Laundering Directive for EU countries to set up and make public registers of beneficial owners of companies was a major step forward, helping shine a light on this murky world. A 22 November 2022 ruling by the European Court of Justice invalidating these rules and so denying public access to beneficial ownership information is therefore extremely concerning.

“Given the EU’s position as a global leader in beneficial ownership transparency, we fear that the ruling risks having a chilling effect on other countries that are deliberating whether or not to open up their registers, or are currently legislating for public registers. The ruling will also have a direct impact on the ability of civil society, investigative journalists, and even competent authorities in other parts of the world to access EU company ownership information, something which is critical to identifying and recovering stolen assets.

“Company ownership transparency is not only a tool for rooting out corruption. It is also fundamental for building confidence in our business environments and critical for establishing public trust and accountability in the rules that govern us – both essential ingredients for the functioning of democracy.

also contribute to combatting tax evasion efforts and improve integrity in public procurement.

“They are important also in tackling natural resource crimes, and improving governance in extractive industries. It is precisely on these bases that civil society has successfully campaigned for public registers in Nigeria, Ghana, Zambia, Liberia and Kenya, among others.

“We therefore urge the European Commission to make a clear choice of openness over secrecy and quickly set out how they intend to ensure beneficial ownership registers across the bloc are accessible to the public again as soon as possible.”

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