“Extremely sobering for people who are looking for scandals.”

February 22, 2023 11:24 AM

What reporters found does not explain precisely why Hansen filed his fateful lawsuit or whether he appreciated its far-reaching ramifications. Hansen claims that he had only been trying to protect his own privacy and had not wanted the registries to be closed. But the findings do show why he, or his business partners, might have an interest in corporate secrecy. As it turns out, Hansen has been the director or owner of at least 117 companies in Luxembourg, the British Virgin Islands, Belize, the Bahamas, and other countries around the world over the past 16 years. from The Luxembourg businessman who got Europe’s corporate registries shut down – and his secret offshore interests
posted by chavenet (20 comments total)

That's a disappointing result. Privacy is important but so are beneficial ownership registries as without them it is much easier to engage in money laundering and tax evasion. On the privacy vs transparency continuum I'd favour transparency much more highly but I know that opinions will differ on that. I hope the EU is able to enact new legislation that will comply quickly.
posted by any portmanteau in a storm at 11:53 AM on February 22, 2023 [8 favorites]

This is super discouraging but I am glad for the investigative reporters who at least dug into the background of the guy responsible. When is dinner ready? I’m really eager to eat the rich.
posted by Bella Donna at 12:54 PM on February 22, 2023 [12 favorites]

One thing that informs my viewpoint is that in Ontario, and I'd wager most former British colonies, land ownership records are public. They aren't free here, you need to pay a set fee to access them, but anyone willing to pay the fees can get various records for the entire province from an official website*. If land ownership, which is the original capital property, is public then it isn't so hard to extend that to other forms of capital property such as shares in companies. I could believe that other countries are not so open with this information and without that kind of longstanding historic practice it would be harder to force that information to be more open especially if the people that own all the property don't want it to be more open.

*If the land is owned by a company that isn't publicly listed then you'll end up in the same situation of not knowing who the real owners are because we don't have a registry for beneficial owners of companies here yet either. But if we were to have one I don't think this kind of privacy rights attack would work against it.
posted by any portmanteau in a storm at 12:59 PM on February 22, 2023 [6 favorites]

An organization should have no legal rights unless its ownership and control are transparent.

Failing to disclose, or attempting to hide, ownership or control should be grounds for dissolving the organization in question and claiming its assets, while transferring its debts and obligations to its owners and controllers.

If the person with control or ownership of a company or property is acting as a proxy for someone else, that to should be disclosed. Failing to do so means you are attempting to hide the real ownership or control. So if you own or run a company as a favour to your uncle or your friend, you should list them as a potential proxy.

Temporary hiding ownership might be legitimate; but such temporary ownership hiding must be both limited, restricted to a purposes (like hiding you are building a factory from a competitor), and not be used to hide other operations (like political contributions or the like) unrelated to the restricted purpose.
posted by NotAYakk at 1:06 PM on February 22, 2023 [11 favorites]

Disclosing is different from having the information publicly available. There could be legal requirements for companies to disclose their beneficial owners to the appropriate government department that could still mean that the public wouldn't have access to them. Apparently in Ontario the law as of Jan 1 requires that corporations keep a list of all beneficial owners so that they can provide it if requested by the government but the government isn't collecting this information or placing it in a public registry. It's a step in the right direction albeit a pretty small one.
posted by any portmanteau in a storm at 1:23 PM on February 22, 2023 [3 favorites]

One thing that informs my viewpoint is that in Ontario, and I'd wager most former British colonies, land ownership records are public. They aren't free here

I'm in California and I carry land ownership records for most of the state (by area) on my phone. Not via the network, but stored on the phone itself so I can use it offline. I don't store records for urban/suburban areas, so that eliminates a majority of property parcels. But there's not THAT many discrete parcels in the state, not when compared to modern phone storage.

I hunt on public land, and I don't want to unknowingly shoot guns in someone's backyard.
posted by ryanrs at 2:34 PM on February 22, 2023 [7 favorites]

Hansen told OCCRP that he had never intended to get the registry shut down, but had only been trying to protect his own right to privacy.
This is such obvious bullshit. Given the myriad of companies he's involved in, there's no way any kind of exemption could hide his ownership or interest in companies without also being applied to dozens or more other individuals. He clearly wanted the whole thing shut down to hide not only what companies, but also what individuals he's in bed with.

In Australia, details of ownership, directorship, official documents submitted etc for companies are publically available, albeit at a fee of around $20. You can search them here.
posted by dg at 6:14 PM on February 22, 2023 [7 favorites]

This is outrageous. I understand why BS territories promote secret corporate registries - they want the fees and don't give a crap about the effects their policies have on the rest of the world. But it's an outrage that the ECHR did this based on privacy concerns.

It's important to note that individual countries could still require registries to be public under their own domestic laws. The reason so many countries immediately shut down their registries is obvious. They want to benefit from illegal movements of money, mostly from Russia.
posted by 1adam12 at 6:24 PM on February 22, 2023 [7 favorites]

Yeah, I don't think privacy applies to ownership of companies.

But then I think 'Murca should adopt the Norwegian approach and make all tax records 100% public and available online.

Businesses and money are so prone to abuse that allowing them to keep secrets is harmful to us.
posted by sotonohito at 6:38 PM on February 22, 2023 [15 favorites]

Sorry, ECJ. Not ECHR.
posted by 1adam12 at 7:38 PM on February 22, 2023 [2 favorites]

Failing to disclose, or attempting to hide, ownership or control should be grounds for dissolving the organization in question and claiming its assets

For real assets (land and buildings) the standard response to the State being unable to find out who is responsible for any unpaid taxes they've accrued should simply be to occupy them and deny access, then deem anybody who objects to those arrangements personally liable. If nobody objects after some defined minimum period then the State's existing protection of the private property rights in that asset would be withdrawn and the asset would be transferred into public ownership.

The uber-wealthy only own the assets that they do because we collectively support their right to do so, and if they're not even going to tell us whose property rights we're protecting in respect of any given property then I can see no reason at all why we should be obliged to keep protecting them.
posted by flabdablet at 7:52 PM on February 22, 2023 [15 favorites]

I'm generally a fan of trying to understand the motivations behind both parties to a contentious issue, but I cannot really see the public benefit in keeping the beneficial owners of real property secret.

I can see—in its historical context—the reasons why Société Anonyme were anonymous, but they were mostly practical ones. Maintaining a registry of shareholders restricted the liquidity of shares, which diluted their value on the market. Making simple bearer instruments was easier and made them almost infinitely liquid—same as bearer bonds on the debt side. None of those reasons really exist today. Bearer instruments are basically gone in finance, because the practical reasons for their existence... just don't hold true. Having a centralized registry of everyone who owns shares in a particular company, or who owns bonds payable by a particular entity, is actually easier than issuing bearer certificates that let anyone turn in coupons for payment (and then validating those coupons, paying them, etc.). Practicality now runs against anonymity.

There doesn't seem to be much social benefit in anonymous ownership. If you are a part-owner in some hideous corporate exercise in slave-trading (as I suspect a whole bunch of Société Anonyme were), maybe your neighbors should know exactly what the fuck you're up to. If you're eking profit out of something awful, such that you don't want your real name attached to it... why are we allowing this, again? I'm not sure anyone should be allowed to profit from anything they aren't willing to stand up in the public square and say they're proud to be a party to.

If there's a case for anonymous control of corporate structures I've yet to see a convincing argument that doesn't start from some really tortured premises (such as "tax dodging is a human right" or some other weirdo libertarianesque bullshit).

Anonymous control of corporations just seems to accelerate the collapsing of morality onto law; it ensures that whatever is legal that is profitable, will be done, because all the hindrances that normally prohibit immoral or antisocial behavior (despite its profitability) have been removed. This doesn't strike me as a positive change.
posted by Kadin2048 at 8:10 PM on February 22, 2023 [8 favorites]

I cannot really see the public benefit

That would be because there isn't one.
posted by flabdablet at 8:31 PM on February 22, 2023 [5 favorites]

This kind of thing is why I laugh every time the EU fucking dares to criticize other (tbh, poorer, more brown) countries for “corruption”.

Fix your own fucking house before criticizing others, maaaaayyybe?
posted by aramaic at 8:49 PM on February 22, 2023 [4 favorites]

It's terrible policy that I disagree with, but it's not clear to me how making bad decisions is corruption? Is there evidence that ECJ members are taking bribes or have personal connections to Hansen or something?
posted by Dysk at 9:58 PM on February 22, 2023 [1 favorite]

This reminds me of Chicago's Parking Deal where Mayor Daley blatantly ripped off the residents of Chicago for almost a hundred years by selling off the parking rights for the entire city for about 1/15th of their actual value. Now Chicago doesn't control its own streets and has the most expensive street parking in the U.S. The corporation that bought them is offshore and its ownership was and still is secret. For all we know it could be the Daley's themselves who own it.
posted by srboisvert at 2:38 AM on February 23, 2023 [6 favorites]

One thing that informs my viewpoint is that in Ontario, and I'd wager most former British colonies, land ownership records are public.

That is different from registers of ultimate beneficial ownership. Such a register requires a natural person (aka a human being to you and me) to be identified and is a much better match to a colloquial understanding of who "really" owns a piece of land than the paper owner which might be a unit trust in the Bermudas owned by a holding company in the Caymans owned by ???

England has had public land ownership records basically forever but only introduced mandatory registration of beneficial ownership of land in 2022 (in response to the Russian invasion of Ukraine) and has only registered ultimate beneficial ownership of companies since 2016 (that one at UK level rather than England & Wales).

Apparently in Ontario the law as of Jan 1 requires that corporations keep a list of all beneficial owners so that they can provide it if requested by the government but the government isn't collecting this information or placing it in a public registry. It's a step in the right direction albeit a pretty small one.

Switzerland requires this as well. Broadly the four levels of disclosure which can exist are:

1) Nobody is required to know who "ultimately" owns a company
2) The company is required to know its own ultimate owners (and presumably can be compelled to disclose this as part of targeted legal action) but there is no central register
3) The government knows who the ultimate owners are but that register is not public
4) Everybody can see who the ultimate owners are

(2) is quite weak because it means no action can be taken against known malefactors until solid information is received that entity X is actually controlled by person Y, you can't just search for person Y in the central register.

(3) does a lot of what you might want to get done with (4) and may be easier to get through in places that don't have (4). Crucially though, (4) can be used to watch the watchmen and make sure that governments are doing what they should in policing ultimate beneficial ownership, in the absence of that you have to take the word of the government's internal compliance and inspectorate functions that nobody is getting around the rules.
posted by atrazine at 3:46 AM on February 23, 2023 [6 favorites]

Did anybody else find that headline very confusing? I couldn’t understand why he got his secret offshore interests shut down.
posted by Horace Rumpole at 5:53 AM on February 23, 2023 [2 favorites]

I've known a couple people with stalkers who very much wanted to buy a house but not have their names attached, but that could probably be managed by (3) or even by a specific fix.

Anything weaker than (3), how can one trust tax collection at all?
posted by clew at 10:07 AM on February 23, 2023 [2 favorites]

Anything weaker than (3), how can one trust tax collection at all?

Given recent events such as where the Chancellor of the Exchequer Nadhim Zahawi, head of the Treasury, negotiated a sweetheart settlement with HMRC you can't even with (3) or (4). The UK's revenue service has been long known to have been fully captured by business interests and negotiation ridiculously lenient penalties for tax frauds since even before the Tories were in power. It's part of why new labor lost their grip.

The US has this problem as well where the rich are simply not audited because auditing rich people is expensive and they put up a legal fight.

This kind of bullshit is why weath and ownership needs to be in extremely bright sunlight otherwise it goes bad really quick.
posted by srboisvert at 12:58 PM on February 23, 2023 [4 favorites]