Tax transparency campaigners are looking to the European Parliament to continue to have a strong stance on public tax disclosure after EU member states agreed in December on a position that weakened European Commission proposals contained in the latest draft of the  Anti-Money Laundering Directive (AMLD).

The 4th AMLD mandated that every EU member nation set up a national register of the beneficial owners of companies incorporated within its borders. However, initially access to these registers was only to be open to those with a 'legitimate interest'. Although, following the Panama papers scandal the European Commission proposed to alter the directive by dropping the legitimate interest clause, making all company registers across the EU public by default.

The Financial Transparency Coalition (FTC) said this was a common sense change supported by other civil society groups such as Transparency International and Global Witness after the Panama Papers revelations showed how important it was to be able to know who is really behind companies and trusts.

However, with negotiations on the final text of the AMLD directive now due to take place with the European Parliament, the negotiating stance agreed by the member states opposed making registers public by default and their proposal wouldn’t see registers come online for those with legitimate interest until 2020.

Porter McConnell, Director of the FTC said: “We’re mere months removed from perhaps the most potent example of why we need public registers, and yet EU member states are now trying to keep barriers between the public and information. It’s as if they’ve forgotten the public outcry that followed the Panama Papers revelations”

“Quite extraordinarily, member states are even proposing to dilute the commitments they agreed to last year—company registers were supposed to be accessible to those with a legitimate interest by the end of June 2017, but now they want to postpone this until 2020,” said McConnell."

[amazon_link asins='1786070472' template='ProductAd' store='manifest-21' marketplace='UK' link_id='e58b477a-da5e-11e6-be28-51a27097c118']The FTC also highlighted that there was a disagreement about the meaning of legitimate interest with the Netherlands deciding to make its register public partly because vetting who should or shouldn’t have access would simply be too difficult and costly to administer. However, the FTC said that with no EU-wide definition, individual member states would have a great deal of discretion in deciding how open their national registers would ultimately be if the legitimate interest clause was left intact.

Despite the negotiating position agreed on the directive the UK has already adopted a public register and Slovenia, Denmark and France have also committed to doing the same.

The FTC said that the European Parliament has long-backed public tax transparency and it and other campaigners will be hoping that it can change the mind of the member states.