Transparency International (TI) today submitted a petition to the United Nations General Assembly to create an international standard for beneficial ownership. This petition was requested to be addressed by the UN General Assembly Special Session Against Corruption (UNGASS 2021), scheduled to be held in June 2021. Including Transparency International Korea (TI-Korea Chapter), around 700 signatories from 120 countries, including academics, research centers, corporations and business managers, civil society, activists, government agencies, and public officials, participated in the petition.
The petition urges each country’s representatives to attend the UN General Assembly to pay attention to the petition. Identifying the beneficial owners of borrowed-name assets hidden behind other people’s names is a crucial method to banish corruption and block illegal funds. In addition, this is a way to achieve fair resource allocation and social justice. Besides, it is critically important in achieving the government’s aim to achieve the top 20 rankings in the Corruption Perception Index (CPI) of Transparency International’s annual report.
In numerous investigative reports on scandals, it has been revealed that companies created names using the names of others as a hiding place for siphon funds and used as a tool for various illegal activities. In Korea, there has been a long debate over the beneficial owner of DAS, and even now, it is highly likely that several illegal funds are hiding in the shadow of pseudonyms.
In many countries, significant progress has been made, including the European Union, with the establishment of beneficial ownership registry offices to prevent such illegal funds from hiding behind other people’s names. The recently revealed case of OpenLux shows the strength of the beneficial ownership public registry. They showed that money laundering, corruption, tax evasion, and other criminal activities could be confirmed through the registry office.
Despite the efforts of many countries, there is still a long way to go. The most troubling point is how to block the flow of illegal funds across borders. The petition calls for the establishment of fundamental principles that apply to the international community. The critical requirement here is to establish an ultimate beneficial ownership registration office that contains information, such as verification and strong identification of the actual owner.
The International Financial Action Task Force’s (FATF) evaluation results published in 2020 pointed out that South Korea’s beneficial ownership management system was not adequately established. The international community urges the Korean government to act with measures accordingly.
We demand that the Korean government act with effective efforts to improve our society’s integrity by providing a system to check the beneficial owners’ information, blocking the space for illegal funds to hide. To this end, it is necessary to actively review the establishment of a registration office for beneficial owners, where consensus is formed internationally. Besides, it demands active participation in the relevant resolutions to be held at the UNGASS Special Session in June this year.
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