Luxembourg’s investment fund industry is a financial “black box” that helps people launder illicit money and avoid tax
The OpenLux investigation by journalists from a group of media organisations, including Le Monde, Le Soir, the Miami Herald and Sueddeutsche Zeitung, sifted through four million documents and records on 260,000 companies linked to Luxembourg’s 4.5 trillion euro ($5.4 trillion) investment funds sector between 1955 and 2020.
Luxembourg fund industry is a $5.4 trillion ‘black box’
Under Luxembourg law, investment funds must publish the names of “beneficial” or end investors — the real owner of shares — in a register to help authorities crack down on tax evasion and money laundering.
Over 80% of private investment funds examined did not declare who their end investors were, said the investigation, which also involved Transparency International and the Anti-Corruption Data Collective.
“Taken together, a significant number of Luxembourg-based funds appear to have failed to identify their owners as required by law,” the investigation said. “The industry, with the trillions of euros in assets under its management, continues to operate as a black box.”
It called on Luxembourg and the European Commission to tighten the current beneficial ownership definition.
Luxembourg’s government said it was “fully in line and compliant” with all EU and international rules on combating tax abuse and avoidance.