Financial Transparency Coalition

I have suggested earlier today that if we are to reform offshore we have to start at home. I have three goals. The first is to make sure there is information on public record to ensure that the users of limited liability entities, trusts and other related entities are accountable for what they do, as follows:

1. All companies to be registered with full details of the following on public record:
   1. All beneficial owners, with nominee intermediaries also disclosed;
   2. All directors on public record and the full names of all those in accordance with whose instructions they act also on public record;
   3. All accounts on public record, and abbreviated accounts not allowed;
   4. The same for all protected cell companies and international cell companies with full details disclosed for each cell;
2. Similar details for all limited liability partnerships;
3. All trusts on public record with the following disclosed:
   1. The trust deed;
   2. All letters of wishes;
   3. The name and address of the settlor;
   4. The names and addresses of all trustees and the names and addresses of all those on whose instructions they act;
   5. The name of any enforcer and the instructions they hold;
   6. The annual accounts of the trust;
   7. Details of all trust distributions with names and addresses of beneficiaries on record;
4. Similar information for all foundations;
5. Similar information for all charities;
6. Trusts with reversion to settlor to be abolished;
7. Full details of all redomiciliation on public record.

This would ensure that those choosing not to account in their own name (for which they would have a right to absolute privacy unless they owned land) are held accountable for what they do – and rightly so – which is why this is an issue I will return to in part 4 of this programme.

Second, I’d want governments held to account, and so we should expect the following on the part of all governments:

1. Full cooperation with the European Union Savings Tax Directive with maximum cooperation on information exchange;
2. An offer of full information exchange in the form outlined by Tax Research LLP in a memorandum published in June 2009[i] offered to any state that wants it, subject only to limitation in the case of potential human rights abuses (the same to be true for disclosures on public record – but with full information then being held by an international third party in the capacity as human rights registrar);
3. TIEAs and DTAs to be offered to whomsoever wants them, subject only to human rights limitations.

Finally, I’d want government itself to be accountable. So, I’d want the following:

1. Governments should publish budgets setting out their expenditure plans in advance of them being incurred, and they should require parliamentary approval;
2. Governments should account on a regular and timely basis for the taxation revenues they have raised:
3. Governments should account for the expenditure of funds under their command on a regular and timely basis.

The arguments are in explanatory note 6, page 55, here.

This is a commitment government’s must make to all their people to ensure they are accountable, those in their state are accountable and that the opportunity for abuse within the state is minimised in the interest of all.

I’d think that’s pretty hard to argue with.

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[i] http://www.taxresearch.org.uk/Documents/InfoEx0609.pdf