WASHINGTON: The world's leading economies took a step Friday toward denying tax evaders and money launderers around the world the ability to hide behind anonymous shell companies.
Acting in the wake of the Panama Papers scandal, finance chiefs of the Group of 20 powers meeting in Washington supported proposals requiring authorities to share the identities of the real owners of shell companies, reports AFP.
They also backed creating a blacklist of international tax havens which do not cooperate with information-sharing programs.
Making the beneficial owners of companies, trusts and foundations transparent "is vital to protect the integrity of the international financial system," the G20 finance ministers and central bank governors said in a statement.
Doing so is important "to prevent misuse of these entities and arrangements for corruption, tax evasion, terrorist financing and money laundering."
The declaration came hours after the Panama Papers scandal claimed another victim. Spain's industry minister Jose Manuel Soria resigned Friday over allegations he had links to offshore companies.
Files from the leaked document trove of Panama law firm Mossack Fonseca showed Soria was an administrator of an offshore firm in 1992. He was just the latest in a number of powerful officials, including the leaders of Russia, Iceland, Britain and Argentina, linked by the Panama Papers to offshore tax havens.
The leak provided the impetus for the strong proposals to the G20 Thursday by Germany, France, Italy, Spain and Britain.
The five said they would take the lead on creating an international database that provides tax and other authorities the identities of the owners of shell companies, trusts, foundations and other vehicles often used to hide assets.
"Today we deal another hammer blow against those who hide their illegal tax evasion in the dark corners of the financial system," British Finance Minister George Osborne said in a statement.
Speaking during the Spring Meetings of the World Bank and the International Monetary Fund, World Bank President Jim Yong Kim said the illicit financial activities enabled by tax havens undermined the fight against poverty.
"When taxes are evaded, when state assets are taken and put into these havens, all of these things can have a tremendous negative effect on our mission to end poverty and boost prosperity," he said.
Under pressure from the IMF and World Bank to help prevent the world economy from stalling, the G20 also pledged to support growth with more fiscal actions like more investment, rather than relying on central banks to stimulate activity with monetary measures like negative interest rates.
"Monetary policy alone cannot lead to balanced growth," they said.
"We will use fiscal policy flexibly to strengthen growth, job creation and confidence."
The ministers, however, warned that the global economy faced a number of serious risks, among them the possibility that Britain would pull out of the European Union.
"Geopolitical conflicts, terrorism, refugee flows, and the shock of a potential UK exit from the European Union also complicate the global economic environment," they said.
The G20 statement came during the IMF and World Bank Spring meetings, where officials warned of potentially severe damage to the regional and global economies from the so-called Brexit.
With two months to go before Britain holds a referendum on splitting with the EU, IMF chief Christine Lagarde called on the two sides to save their "long marriage".
"Because keeping Europe together after what it has gone through over the last century, and what the risks are on the horizon... is actually a huge asset which is vastly underrated in my view," she said.