Fighting the abuse of Company Law: Legal Certainty for Companies on the Internal Market

Transcription

1 Salzburg 25 April 2014 Fighting the abuse of Company Law: Legal Certainty for Companies on the Internal Market Eliana Morandi Notaio in Rovereto

2 Proposal for a Directive on single-member private limited liability companies (Societas Unius Personae) SUPs Shareholders: natural Or Legal persons Registration procedure completely on-line, with standard articles of association Physical presence of the founders not required, identification by Electronic Ids, to be accepted by face value

3 No assets required: 1 Euro capital no compulsory reserves Directors: natural or Legal persons, MUST accept instructions from shareholeder SUP can be Registered in one State, central administration possibly in another (multijurisdictional, forum shopping, misleading about «real» nationality, impossible to check «real» business activity and money flows)

4 OECD Behind the Corporate Veli USING CORPORATE ENTITIES FOR ILLICIT PURPOSES

5 Abuse of corporate vehicles (Cameron, Uk PM) They are the global getaway cars for: Money laundering Corruption Tax Evasion Terrorism funding Danger for Economical, social and Democratic systems

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12 World Bank The Puppet Masters nov 2011 Registers data should be: Adequate Accurate, reliable (must be ex ante verified) Timely and up-dated Easily accessed by the Internet Government-sanctioned and/or audited, inputted by indipendent, fully accountable, notin conflict subjects

13 Digital ID Problems USA and Europa 2009 ABA Id Management Task Force, to study and develope the perfect Identity Trust Framework International Cyber Crime Center IC3 Nov White House National Strategy for cybersecurity as a means to protect economy and civil rights 2012 Letter from ABA Idm TF to UNCITRAL

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16 Approved by the EU Parliament on March 2014

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23 Official Documents point out Essential role of Beneficial Owner identification Essential role of Registers: pro-actively Reliable, up-dated, complete and accurate (Legal Certainty) Dangers and problems of Digital Id management (ABA IdMng Task Force) Role of Intermediaries (TCSPs and DNFBPs): facilitators and accomplices OR GATEKEEPERs?

24 WHAT HAPPENED in 2012? An already seen scenario: huge scandals Mortgage Fraud and Subprime scandals (Obama Statement) Foreclosure-gate till now (Financial Times ) Grave Secrecy 2012 Offshore Leaks: 2013

25 Common elements of the scandals Lack of or lax regulation Impersonal transactions Anonimity of electronic Ids, allowed by Internet (no Beneficial Owner) No control on data input in registers (no legal certainty) Conflict of interest in (company) services providers (accountants and lawyers)

26 Why did it start to happen in 2012?

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34 Role of Company Service Providers: Lawyers, accountants and other experts A well-paid industry of accountants, lawyers, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct.

35 The Numbers 170 Countries involved Studies have estimated that cross border yearly flows of global proceedings of financial crimes total between $ 1 1,6 Trillion Wealth tucked away in offshore havens $ trillion (Us+Japan together)

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38 What the shell companies scandals showed Major role played by UK and US shell companies (On-shore jurisdictions, as much involved, if not more, as in off-shore jurisdictions Major role of Registers unreliability Major role of connivent or supporting CSPs (accountants, lawyers, tax consultants)

39 What is «crony capitalism»? Image From The Economist 15 March 2014

40 2013 General Conference of the European Consortium for Political Research (ECPR) State capture, white collar crime and corruption in Europe: the role for nonstate actors.. via single case studies to broad comparative analyses, European anti-corruption scholars are clearly concerned by the potential these trends have to undermine democratic processes across the continent

41 Official Documents point out Essential role of Beneficial Owner identification Essential role of Registers: pro-actively Reliable, up-dated, complete and accurate (Legal Certainty) Dangers and problems of Digital Id management (ABA IdMng Task Force) Role of Intermediaries (TCSPs and DNFBPs): facilitators and accomplices OR GATEKEEPERs?

42 Identity Trust Framework Deeds and Company Register Governmentguaranteed data-bases: Company Reg IRS Finance Land Registry Cadastre Users Qualified TRUSTED Intermediary ( Notary (Civil Law

43 Federation identity Land Register Ministry of Finance IRS Finance dept Italian Notary Council Connected Token SAML with Intermediary identity AND attribute certification Login SAML Security Assertion Markup Language Italian Notary

44 the Proposal of Directive on single-member Limited Liability Company: Is it a proper vehicle to fight the Abuse of corporate vehicles?