UK next in the UN hot seat over impact of City of London, Crown Dependencies and Overseas Territories tax policies on women’s rights

Guest blog
Kathleen A. Lahey
Professor of Law, Queen’s University
Non-Executive Director, Tax Justice Network

Advocates for gender equality in the United Kingdom of Great Britain and Northern Ireland or in any of its three Crown Dependencies and fourteen Overseas Territories have a unique opportunity to address the UN Committee on Discrimination against Women in Geneva by 28 January 2019 on how the UK’s tolerance of offshore tax avoidance and financial secrecy laws undercuts gender equality.

In several groundbreaking decisions and reports released beginning in 2014, this UN Committee has concluded that all countries that have adopted the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) have obligations to raise enough budgetary revenues to fund gender equality programs in all spheres of their influence. For the UK, this means that the Government has a responsibility to ensure that businesses and wealthy individuals do not use either UK domestic facilities such as those provided by the City of London or by its offshore Crown Dependencies or Overseas Territories to avoid taxation or accountability for illicit financial gains.

Recent CEDAW actions have increasingly recommended that governments take specific steps to reduce gender inequalities. In 2014, the CEDAW Committee decided in the Blok complaint, which was brought under its Optional Protocol rules, that the Netherlands could not exclude self-employed women from maternity leave provisions, requested the government to change the legislation, and directed it to pay reparations to the women injured by this discrimination. In 2015, the Optional Protocol Canada Inquiry produced five pages of detailed directions on program and gender equality improvements crucial to help lift Canadian women from poverty.

Then in 2016, submissions by Alliance Sud, the Center for Economic and Social Rights, the NYU School of Law Global Justice Clinic, Private Eye and Tax Justice Network resulted in the CEDAW Committee issuing Concluding Observations[1] that call on Switzerland, ranked number one on the Tax Justice Network’s Financial Secrecy Index, to take undertake impact assessments on how its financial secrecy and tax laws affect women’s rights overseas and change any its domestic policies that contribute to those violations of their equality rights.

These developments provide ample basis for making similar types of submissions to the CEDAW Committee by 28 January 2019[2] on how the UK’s network of domestic and Crown Dependencies and Overseas Territories tax and financial disclosure rules impairs women’s rights to gender equality at home and overseas, and thus need to be subject to the same kinds of changes.

The CEDAW Committee called on all UK sectors to address these points in the List of Issues delivered to the UK Government on 3 August 2018:

• In paragraph 1, how the UK is fulfilling its indication that it ‘will soon’ extend the application of CEDAW to its Crown Dependencies and Overseas Territories, and
• In paragraph 5, what measures the UK has taken to ‘conduct independent, participatory, and periodic impact assessments of the domestic and extraterritorial effects of the State party’s financial secrecy, trust and corporate tax policies and laws, such as those applicable in the Cayman Islands, on women’s rights and on the substantive equality of women and men? In the light of the negative impacts of the State party’s austerity measures on programmes that benefited women and girls, please inform the Committee if the State party envisages assessing the extent to which revenue losses, due to the use of offshore tax avoidance facilities, exacerbate gender inequality in the State party.’

The UK’s 16 November 2018 replies[3] to the CEDAW Committee List of Issues consist of two limited statements on which civil society, academic, human rights and other stakeholder organizations can provide crucial evidence to the Committee in its deliberations, which begin on 18 February 2019:

• In paragraph 3, the UK advises that as of 2017, four more Overseas Territories became subject to CEDAW and that extension of CEDAW is ‘underway’ in four other ‘remaining’ locations; and
• In paragraph 7, the UK advises that withdrawal of reservations regarding the Isle of Man ‘will be progressed in due course.

Virtually none of the substantive effects of the combined UK and Crown Dependencies and Overseas Territories financial secrecy and tax avoidance facilities on gender equality were addressed by the UK Government in this exchange of documents.

The challenges are great: The UK is the second biggest centre for wealth management after Switzerland, and, at the same time, its own National Crime Agency acknowledges that ‘hundreds of billions of pounds of international criminal money is laundered through its banks every year.’ The UK accounts for 17 per cent of the global market in offshore financial services, even though it is itself only ranked 23rd in the FSI. Not only is the City of London one of the world’s largest financial centres, but it is also ‘built substantially on “offshore” characteristics’ and is well known for its lax but accessible financial regulation and services.

In addition, however, the UK still provides considerable support and a great deal of control over the Crown Dependencies and Overseas Territories. Jersey Finance, the official marketing arm of the Jersey offshore financial centre, states that ‘Jersey represents an extension of the City of London.’ The Panama and Paradise Papers have shed an increasingly strong light on the antisocial and crime-fueling activities of the Overseas Territories, while illicit financial flows continue unchecked in the UK as well as in the Crown Dependencies.

In the meantime, women in both the UK and its satellites continue to face high levels of gender inequalities that are not being actively or effectively addressed by their governments.

The ground-breaking outcomes of CEDAW’s review of Switzerland’s offshore and financial secrecy policies demonstrate what can be achieved when gender equality, human rights and tax justice advocates join forces to use existing laws and international treaties to challenge in-country and cross-border tax abuse as violation of human rights.

As submissions to the CEDAW Committee’s upcoming Review session on the UK become available, they will be made available under the Tax Justice Network’s Gender and Tax Justice page.

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[1] United Nations, Committee on the Elimination of Discrimination against women, Convention on the Elimination of All Forms of Discrimination against Women [CEDAW Committee], Concluding observations on the combined fourth and fifth periodic reports of Switzerland, UN Doc CEDAW/C/CHE/CO/4-5, paras. 40-41, at pg 15

[2] Participation by Non-Governmental Organizations, Seventy-second session (18 February–8 March 2019), Geneva, Palais des nations, Room XVI, par. V, at pgs 1-2, setting the deadline for written submissions at 28 January 2019.

[3] CEDAW Committee, List of issues and questions in relation to the eighth periodic report of the United Kingdom of Great Britain and Northern Ireland, Addendum, Replies of the United Kingdom of Great Britain and Northern Ireland to the list of issues and questions, Seventy-second session (18 February–8 March 2019), UN Doc CEDAW/C/GBR/Q/8/Add 1, 16 November 2017, at pgs 2-3.