UK IN OVERSEAS TERRITORIES RULING
BRITAIN’S government agreed on Tuesday (1) to order its overseas territories to make secretive company ownership information public to try to tackle corruption and tax avoidance.
Overseas territories and crown dependencies have come under increasing pressure to reveal who is behind anonymously-owned companies, with campaign groups saying such secrecy aids money laundering, tax evasion and corrupt diversion of public funds from developing economies.
Many of these territories, such as the Cayman Islands and the British Virgin Islands, have large financial services sectors because they levy low taxes and ownership of businesses lacks transparency.
Despite repeated calls for more openness, British crown dependencies and overseas territories are only required to reveal information on the true owners of offshore companies to law enforcement bodies, and then only if asked.
Alan Duncan, a junior foreign office minister, told parliament the government would support an amendment brought by two members of parliament calling for a central register of company ownership in these territories as lawmakers debated an amendment on an anti-money laundering law.
“We have listened to the strength of feeling in his house on this issue and accept that it is without a doubt the majority view of this house that the overseas territories should have public registers,” Duncan said.
Britain has been making efforts to clamp down on tax evasion and corrupt flows of money through its large financial services sector, but has faced resistance from some of its overseas territories because the secrecy and low taxes are what makes their finance sectors attractive.
Labour MP Margaret Hodge, who introduced the amendment, said it will help prevent tax evasion and disrupt the activities of criminal gangs and militant groups. “It will stop them exploiting our secret regime, hiding their toxic wealth and laundering money into the legitimate system, often for nefarious purposes,” she said.
“With open registers we will then know who owns what and where, and be able to see where the money flows. Then we will better equipped to root out dirty money and deal with the issues that arise from that.”
Duncan Hames, a director of policy at Transparency International UK, said these territories have been the “Achilles Heel” of Britain’s defence against money laundering. “Corrupt individuals everywhere will be deeply concerned that they are about to lose the secrecy afforded by the British Overseas Territories that has until now given them an easy route to launder their ill-gotten gains,” he said. (Reuters)
