'Owner searches: A cross-sectional analysis of companies and results'

Exclusive: Politicians accused of bribery in some of Latin America's most high-profile corruption schemes are secretly linked to luxury properties in France. Criminals and corrupt people are known to love real estate. It's one of their favorite ways to launder money and enjoy illicit profits.

For a long time, corporate secrecy has been their ally. With the introduction of transparency reforms in recent years, it should be much more difficult to acquire and anonymously own valuable real estate in many countries around the world. In France, authorities collect data on the ownership of companies and real estate. This information has also been available to the public since 2021. To understand how the situation has changed, we''worked with Transparency International France and the Anti-Corruption Data Collective (ACDC). It was a challenge, but we were able to collect and analyze data on both company and real estate owners from both datasets - the same data that informs new Organized Crime and Corruption Reporting Project (OCCRP) investigations.

Many company owners remain anonymous. At the heart of the problem is the failure of companies to fulfill their obligations to disclose their real or "beneficial" owners. Despite being obliged to do so since 2017, more than 1.53 million companies - almost a third of all active companies registered in France - have still not disclosed their beneficial owners.

We conducted a series of tests to identify patterns and''to determine which companies are more or less likely to correctly report their owners. We found that companies' non-compliance was associated with a large number of signs indicating suspicious activity. Sociétés civiles immobilières (SCIs) are a type of private limited liability company in France created to own and manage real estate. SCIs are particularly susceptible to abuse for money laundering through the real estate sector. However, we found that only 63 percent of SCIs disclosed their beneficial owners, one of the lowest rates among all categories of legal entities.

Despite obligations to disclose beneficial ownership, SCIs remain opaque and continue to allow potentially''dubious individuals anonymously own real estate in France. Regarding the beneficial owners themselves, we found that at least 5 percent of companies listed only their legal representatives as owners. This is only allowed if it is not possible to identify a matching beneficial owner. We cannot independently verify whether this is the case for these companies. In addition, since it is not always clear from the data whether the claimed beneficial owner is the actual owner or just a legal representative, there may be many more such cases that go unrecognized.

There are also many cases in the dataset where the same person is the owner''multiple companies. The data shows that 7,137 people own more than ten companies. Of these, 271 are beneficial owners of more than 50 companies.

We also found that companies with French non-residents are less likely to meet their reporting obligations, indicating that companies managed or controlled from abroad are less likely to comply. While the majority of beneficial owners listed in the database declare their French nationality, 190 nationalities are represented in the data. In addition, nearly 4,000 beneficial owners reported more than one nationality. Some of them appear to hold "golden passports" from Cyprus and Malta.

Majority'. 'real estate ownership remains a mystery. We first attempted to link data on companies in France with information on real estate ownership and cross-referenced data on company ownership with information on plot ownership, the smallest parts of the French cadastre plan.

We found that at least 10.35 million plots contain''real estate owned by the companies. We were only able to identify the beneficial owners in about 30 percent of these plots. At the same time, the real property owners in nearly 71 percent of all company-owned French plots remain unknown.

The majority of these companies did not provide data on their real owners or are not listed in the French beneficial ownership register at all. When we took a closer look at the 1.3 million SCIs holding real estate on 2.89 million plots in France, we were only able to identify the beneficial owners in half of the cases. In the Paris region, beneficial owners could not be found for properties in 72 percent of plots owned through SCIs.''Given that SCIs are particularly susceptible to abuse for money laundering through the real estate sector, these reporting rates are alarmingly low.

We also found that foreign beneficial owners appear to be the actual owners of companies that own real estate in nearly 200,000 plots. Among them are Russian politically exposed persons whose companies own real estate in more than 1,000 plots across the country, from villas in St. Tropez to chalets in the Alps to luxury apartments in Paris. For the most part, however, we found that foreign companies can acquire real estate without necessarily disclosing their beneficial owners.

One of the shortcomings of the register of beneficial''owners of France is that it does not provide readily available historical information. Recent efforts to trace assets linked to Russian elites have helped to highlight the need for ownership data over different time periods. Russian elites have been reported to transfer shares or control of companies or trusts, immediately before or immediately after sanctions were imposed. For example, Elizaveta Peskova, the daughter of Vladimir Putin's press secretary Dmitry Peskov, was previously listed as the beneficial owner of a company called SIRIUS in France. On April 29, 2022, she transferred her shares in the company to her mother. At that time, Peskova had already been sanctioned by the United States. Five weeks later''there is still much work to be done to unlock the potential of these powerful transparency tools. The issue of increasing levels of compliance with beneficial ownership disclosure requirements must be addressed as a matter of urgency. Companies that violate their obligations must be penalized. Authorities should also establish a robust verification mechanism to improve data collection and verification to identify misleading or incorrect statements. Types of companies particularly at risk of money laundering, such as SCIs, should be subject to enhanced checks. With respect to real estate, French authorities should begin requiring that foreign companies that own or want to invest in the French real estate sector,''disclosed their beneficial owners. Guidance for real estate professionals and compliance checks on agents in critical regions should also be strengthened. Finally, the French authorities themselves must make better use of available databases, such as beneficial ownership data, to continuously analyze and assess specific money laundering risks in the real estate sector - just as we have done with Transparency International France and ACDC. In fact, before publication, we shared our results with the French authorities, who then conducted their own analysis in response to our request. Their results differ slightly; for example, they came up with an overall beneficial ownership disclosure rate of 83 percent, which, according to''to our research'.