The European Commission (EC) has published Anti-Tax Avoidance Directive 3 (ATAD 3) laying down rules to prevent the misuse of shell entities for improper tax purposes throughout the European Union (EU).

While the directive aims to clamp down on the use of shell companies for aggressive tax planning or tax evasion purposes, its introduction of reporting requirements for EU tax-resident companies can also be expected to unearth shell companies used in trade-based financial crimes.

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