Prime Minister David Cameron Tells UK Territories to Embrace Transparency
April 25th, 2014
April 25th, 2014
While places like the Cayman Islands, Jersey, and the British Virgin Islands have begun entertaining the idea of public registers of beneficial ownership, today, they might have received the biggest nudge yet to move in that direction.
But rather than come from civil society or advocacy groups, this time, the nudge comes all the way from 10 Downing Street.
UK Prime Minister David Cameron has written a letter to the leaders of the UK’s overseas territories and crown dependencies, calling on them to create public registers revealing the true owners or beneficiaries of the companies incorporated on their shores.
From the letter:
As you know, I believe that beneficial ownership and public access to a central register is key to improving the transparency of company ownership and vital to meeting the urgent challenges of illicit finance and tax evasion. So I am proud that the establishment of a publicly accessible central registry of company ownership information will now form a key pillar of our G8 legacy.
The rest of the world is watching us closely and a public registry will demonstrate the sincerity of our commitment to improve corporate behaviour and set a new standard for transparency of company ownership. I hope you will also consult on a public registry and look closely at what we are doing in the UK.
The UK’s recent announcement to create its own public register of beneficial ownership has thrown the spotlight to UK overseas territories, many of which are considered to be tax havens, helping to proliferate illicit financial flows like embezzlement, corporate tax evasion, and criminal activity.
A number of members of the Financial Transparency Coalition (FTC) weighed in on the announcement. U.S.-based Global Financial Integrity said the development, along with increased momentum for similar registers in the European Union (EU), should serve as a catalyst for the U.S. government to address the issue:
“The U.S. is the second easiest place in the world, next to Kenya, for someone to create an anonymous shell company to launder illicit proceeds,” noted Heather Lowe, GFI’s legal counsel and director of government affairs. “The White House has repeatedly endorsed the need for legislation to ensure that beneficial ownership information on all U.S. companies is available (at least) to law enforcement, but the President has not yet stated the Administration’s support for bipartisan legislation—that has been introduced in both the U.S. House of Representatives and the U.S. Senate—which would create registries of beneficial ownership information to do exactly that.
‘Mr Cameron has already led the way on this issue, by committing the UK to introduce its own public register of the millions of people who own companies in this country. He has since encouraged fellow European Union member countries to follow suit and today he is absolutely right to urge the Crown Dependencies and Overseas Territories to do the same.
“If these territories want to shake off the label of ‘tax haven’, then now is the time for them to do it,” [said Barry Johnson, Christian Aid’s Senior UK Political Advisor.]
Shedding light on the beneficial ownership of companies in UK tax havens will help poor as well as rich countries to bring to justice some of the criminals who use secretly-owned companies to commit crimes including tax evasion, corruption and money laundering, safe in the knowledge it will be hard or impossible to prove their links to the companies concerned.
Image is courtesy of Flickr User TheTaxHaven under creative commons licensing.