According to a report by the Bank for International Settlements, an estimated $2 trillion to $5 trillion are laundered globally each year but only less than 1% of this amount is actually recovered by the authorities.
Despite the efforts by both the public and private sectors to oppose money laundering and terrorist financing, a critical challenge remains: Different data sets need to be matched efficiently, particularly in the context of cross-border and instant payments.
The Transparency Fabric is a groundbreaking collaboration between GLEIF, Open Ownership and OpenSanctions aimed to tackle this challenge by integrating high-quality, standardized data into existing sanctions and PEPs lists.
At the heart of the 'Transparency Fabric' lies the Legal Entity Identifier ( LEI ), the 20-character global ISO standard 17442 for legal entity identification.
The LEI connects to key reference information that enables clear and unique identification of legal entities participating in financial transactions, including direct and ultimate parent entities, subsidiaries, branches, managed funds, and umbrella structures.
In addition, the LEI is mapped to other essential standards and identifiers, such as the BIC, MIC, ISIN, S&P Global Company ID, and OpenCorporates identifier, which ensures seamless integration across various financial systems.
Open Ownership is driving the global shift towards transparency over who owns and controls companies by working with governments to make high-quality beneficial ownership data available, including through advocacy for data publishers to use its Beneficial Ownership Data Standard (BODS).
OpenSanctions builds a global watchlist product using open-source technology. By combining data from over 80 sources (including government-published sanctions lists, criminal watchlists and international databases of PEPs), OpenSanctions creates a rich graph of companies and people that pose a business risk.
Together, the 'Transparency Fabric' is about to revolutionize the screening process, making it simpler but more effective and allowing to trace the players in money laundering, terrorist financing, and sanctions evasion, creating a more transparent and secure financial landscape for all.
Higher-quality international beneficial ownership data will be attained, as a result of the efforts of Open Ownership in reconciling the data with OpenCorporates, and the addition of the LEI as the identifier for related entities in beneficial ownership data will further enhance data usability.
Thanks to the mapping of the GLEIF and Open Ownership data to the OpenSanctions database and the graph intelligence solution developed by Linkurious, graph technology will be able to be effectively and easily used to find direct and indirect connections between businesses identified by an LEI and sanctioned persons and companies.