GETTING THE UK’S HOUSE IN ORDER THE OVERSEAS TERRITORIES & CROWN DEPENDENCIES The 2016 Anti-Corruption Summit, hosted in London, is an important opportunity for all countries participating to make ambitious commitments on preventing corruption, putting an end to impunity and empowering citizens to tackle corruption. As the host of this unique event, the UK Government’s credibility to speak on anti-corruption will be undermined if it does not take necessary steps to recognise and tackle corruption within the UK – in other words: to get its own house in order. The UK has many challenges with domestic corruption, with risks identified in areas such as political funding, peer appointments, police corruption, procurement and local government. This paper focuses on the opportunity for the UK to clean up corruption in its Overseas Territories and Crown Dependencies. Our Overseas Territories and Crown Dependencies have committed to storing information about who really owns companies in a central location, accessible by UK law enforcement. This is a good first step, but will not be sufficient to putting an end to the UK’s role in facilitating international corruption. The Overseas Territories and Crown Dependencies are within the UK’s control – the UK has a responsibility to the victims of corruption to increase company and trust transparency in its offshore jurisdictions.
The UK’s Overseas Territories and Crown Dependencies must introduce centralised public registers of beneficial ownership Standards of disclosure of the ultimate beneficiary of companies in the UK’s Overseas Territories and Crown Dependencies should be brought in line with those in the UK: there should be central, public registers of beneficial ownership to prevent corrupt individuals from hiding behind a mask of secrecy and allow investigations, public scrutiny and accountability. The UK Government should proactively assist with implementing these registers as a matter of priority. Transparency International UK welcomes Prime Minister David Cameron’s open commitment to the end goal of establishing public registers of beneficial ownership.1 The problem is that there is no clear plan or timeline for achieving this. At the Summit, the Prime Minister should declare that if the Overseas Territories and Crown Dependencies do not voluntarily create public registers of beneficial ownership by 12 May 2018, they will be required to do so by Order in Council or an equivalent instrument – previously used to end the death penalty (1991) and decriminalise homosexuality (2000).
THE PANAMA PAPERS The Panama Papers leak provided an insight into the industrial scale of the secrecy industry based on the OTs and CDs, an industry that is widely recognised as being used to launder corrupt and illicit wealth stolen from around the world. Of 214,000 corporate entities exposed to date, 113,000 were registered in the British Virgin Islands, just one of the UK’s Overseas Territories.
1 https://www.gov.uk/government/speeches/pm-commons-statement-on-panama-papers-11-april-2016
IN THE UK 69% agree 80% agree 76% agree 83% agree
that it is damaging to the UK’s international reputation to be linked to so-called tax havens†
that companies registered in the UK’s overseas territories should be held to the same transparency standards regarding ownership as those registered in the UK† that the UK Government should make it a legal requirement for the Overseas Territories to uphold the same transparency standards for companies registered there as in the UK† that we should not allow corrupt foreign politicians and businesspeople to spend their proceeds from corruption in the UK‡
TOWARDS A GLOBAL PUBLIC BENEFICIAL OWNERSHIP REGISTER2 Governments at the Summit should agree to establish public registries of beneficial ownership information, and support the adoption of a multi-stakeholder led Global Public Beneficial Ownership Register. Such a Register would collate and present in one place all publicly available data, and also allow companies to self-disclose ownership information thus encouraging others to adopt this standard of transparency. A Global Public Beneficial Ownership Register will: Open Corporates: New Global Register To Shine Light on Anonymous Companies, a Root Cause of Corrupt, Illegal Activities -https:// blog.opencorporates.com/2016/04/04/ press-release-new-global-register-to-shinelight-on-anonymous-companies-a-root-causeof-corrupt-illegal-activities/
2
Christian Aid and Global Witness – Overseas Territories - http://www.comres.co.uk/wp-content/uploads/2016/04/Christian-Aid-and-Global-Witness-_-Overseas-Territories-Poll.pdf
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†
WIN/Gallup Transparency International Unmask the Corrupt Survey 2014 ‡
Photo (Above): Flickr / emdoubleyou0. Photo (Obverse): Flickr / kansasphoto.
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Reduce risk: Make it easier for companies to know who they are doing business with, and making it safer and easier to do business with new clients and suppliers Provide a better investment climate: Give investors better insight into the companies they are considering investing in. Ensure trust in business: Provide society with a better visibility of the activities of companies – from lobbying to public procurement licences to regulatory breaches. Streamline the process: Remove the technical barriers for collecting beneficial ownership information. By acting as the beneficial ownership register in the ‘cloud’, usable by government bodies of all types, and from all jurisdictions it will reduce the burden on companies submitting information multiple times.