Secrecy in BOTs fuelling corruption, says report
(CNS Business): A new report released by a coalition of NGOs, including Transparency International UK, has described some of the British overseas territories (BOTs) as “some of the most notorious purveyors of financial secrecy”, despite promises about more transparency. The authors say a World Bank study found that BOTs are the most popular jurisdictions for the corrupt to incorporate a company.
The World Bank reviewed 213 cases of corruption over a thirty year period up to 2010 and companies domiciled in the BVI and the Cayman Islands were described as “the biggest problems”.
The controversial findings come at a time when the Cayman Islands and other offshore financial centres are coming under pressure from the UK government to introduce direct access to beneficial ownership details of companies listed here and just as the Cayman delegation arrives in London for the Overseas Territories Joint Ministerial Council (JMC).
Premier Alden McLaughlin, Financial Services Minister Wayne Panton and other government officials flew to London on Friday for the annual meeting between the leaders of the overseas territories and the Foreign and Commonwealth Office. Before leaving, McLaughlin said that he would be meeting the BOT minister, James Duddridge, regarding his demands that Cayman allow the UK authorities direct access to all company information here. The premier also stated that Cayman would not allow such access and he committed to resisting pressure to allow any kind of central or public register of beneficial owners until it becomes the industry norm.
British Prime Minister David Cameron has committed to addressing transparency in the financial sector at home and in the territories. But the report, “The UK’s Corruption Problem”, said that, despite the progress, the extent to which banks and other financial accounts can still be hidden from tax authorities allows people to hide corrupt cash and avoid tax, and that no data had yet been exchanged under the new automatic exchange regime.
While Montserrat has become the first of the BOTs to promise to put the names of the people who own and control companies into the public domain and Gibraltar, by virtue of being a member of the European Union, will also have to make the names of beneficial owners available, no other territory has yet agreed to do so.
Joseph Stead from Christian Aid, one of the NGOs involved in the report, said, “With David Cameron planning to host an anti-corruption summit in 2016, now is the time to change things and demonstrate that the UK is as committed to stamping out corruption in its backyard as it is elsewhere in the world.”
The Tax Justice Network said there has been a lot of talk about beneficial ownership but there has not yet been enough action.
