The UK tax havens and broken promises

Here be thieves and fraudsters

By Rosie Sharpe, Money Laundering Campaigner at Global Witness.

There’s been much progress recently in requiring companies to put the names of the people who own and control them – their so-called beneficial owners – into the public domain.  This is really important to tackle the devastation caused by anonymous company ownership – for more information on the problem read the GW briefing.

The UK, Ukraine and Denmark have all announced their intention to create public registers of beneficial ownership, and discussions are currently underway in the European Council on this topic too.  The UK’s tax havens, alas, are not among them.

At last year’s G8 Summit, all of the UK’s tax havens promised to produce ‘beneficial ownership action plans’ stating what they would do to improve company ownership transparency.  (These tax havens are the Crown Dependencies just off the coast of the UK as well as the seven Overseas Territories that have significant financial centres). Later in 2013, the same tax havens also promised to consult on putting the names of the beneficial owners of companies into the public domain.   We at Global Witness cheered loudly: the UK’s tax havens are some of the biggest peddlers of the company ownership secrecy that’s so useful to tax evaders and others crooks.

A year ago, at least some of the tax havens had started to make progress – see the report GW did together with Christian Aid for more details.

But now the havens have had some time to carry out their consultations and announce the results, how have they been doing?  Global Witness and Christian Aid have just put out a short report looking at this.

The answer to that question is pretty depressing.

• One of the Overseas Territories, Bermuda, has not even held a consultation, despite having promised to do so.  Indeed the Finance Minister has already announced that the country will not be adopting a public register until the UK, USA and Canada have all adopted them.
• One of the Crown Dependencies, Guernsey, has yet to hold a consultation on beneficial ownership.
• Of all the havens that have held consultations, none have yet published the submissions made, or published the government’s response to the consultation.  Six of the eight consultations held have been closed for more than three months without the government having issued any response.  In the case of the British Virgin Islands and the Cayman Islands, more than 300 days have lapsed since their consultations closed without the governments saying anything about the results.

In other words, the UK’s tax havens promised to do something, then (maybe) did it but kept so quiet about the results so that nothing on the ground actually changed at all.  It is still just as easy as ever for a wannabe tax evader or corrupt politician to set up a secretive offshore company that will enable them to disguise the ownership of their dirty money.  And that’s despite the fact that the British Virgin Islands, Cayman Islands, Bermuda, Jersey and the Isle of Man all feature in the top 20 list of places most favoured by the world’s corrupt.

The UK’s tax havens need to stop peddling secrecy.  There’s no justifiable reason for a company to hide the names of the people who own and control it.  Only by making that information public will we stop companies being abused by criminals who want to hide dirty money.