The challenge now is to turn the outrage into change.
The Panama papers point the finger at the use of anonymous shell companies to hide or launder money. This problem feeds corruption and tax evasion. The outrage is justified. For citizens of resource rich countries, the risk of losing out on extractive revenues is particularly acute.
Campaigners are calling for the cleanup of tax havens and for companies to report their profits and payments on a country-by-country basis. These measures will surely help, but alone will not end corruption in most of the countries where the companies operate.
National governments have to act too by making their finances transparent. They also need to ensure that all companies operating in their countries are open about who ultimately owns their business.
The EITI has been working on this already over the past two years. It has explored what full disclosure of real company ownership in resource-rich countries would look like. Building on that stakeholders from governments, companies and civil society agreed to adopt new rules on disclosing beneficial ownership for all extractive companies operating in its 51 member countries.
The result is this: by latest 2020, companies that bid for, invest or operate extractive assets in an EITI country must report the name, nationality, and country of residence of the beneficial owner. Further, politically exposed persons in the extractive sector who own extractive assets will be identified and published. This means that countries that produce oil, gas and minerals will know who the owners of the companies that develop their natural resources are, regardless of where these companies are registered, and regardless of how many layers there are between these companies and their ultimate beneficial owners.
No one action or tool is going to address all the challenges of shell operations and tax avoidance. The EITI Requirements on beneficial ownership are a step forward. The international community must now do their part to build on these efforts to ensure that there is international effort to end ownership secrecy.