Archive for May, 2018

UK to force offshore centres to make public the owners of companies

Friday, May 4th, 2018

The UK parliament made a decision to force its overseas territories to make public the owners of companies registered in their jurisdiction, if necessary through an order in council.

Most of British news organizations celebrated this as a victory for transparency campaigners and a major push against offshore secrecy, while the constitutional concerns expressed by the majority of overseas territories’ leaders about British MPs legislating the affairs of largely autonomous territories received very little attention.

The Guardian acknowledged that there may be legitimate reasons to use offshore jurisdictions. “But kleptocracy – egregious and globalized grand corruption – is enabled by anonymous companies, which strip the fingerprints off stolen money and, having done so, hide it under the cover of supposedly respectable corporations. Once all traces of the money’s origin have been removed, the thieves can spend it on New York property, European passports or western politicians, and they do it in vast quantities,” the Guardian said. Accordingto the article, “many of these companies came from the British Virgin Islands, Gibraltar, Anguilla and the other pink dots left on the map of the world, which is why Tuesday’s vote in parliament was so celebrated”.

Also, the Guardian connected Tuesday’s decision directly to the Panama and Paradise Papers.

British tabloid The Daily Mirror attacked one of the few politicians who spoke up on behalf of the overseas territories. It said that Conservative MP Geoffrey Cox “defended tax havens in Parliament after a GBP40,000 Cayman Islands payday” stating the “millionaire MP” had failed to mention in Tuesday’s House of Commons debate that he once represented former Cayman Islands Premier “McKeeva Bush in a corruption trial over his use of government credit cards in casinos.” IT is worth reminding that Mr. Bush was found not guilty in the trial.

News agency Bloomberg welcomed the United Kingdom’s move in a commentary stating it would “let the sunshine in on tax havens” but cautioned that the new transparency would have to be backed by enforcement. It said that corporate anonymity is what had made the British Overseas Territories a huge attraction for overseas money. Open registers “should sow seeds of panic in the offshore financial ecosystem, which has played a central role in recent money laundering and tax evasion scandals.”

The Financial Times analyzed why British Overseas Territories “fear” that the transparency push could “undermine their positions as leading offshore financial centers.”

The potential for legal action by Cayman and Bermuda against an order in council was discussed. However, Tory MP Mr. Mitchell said this was unlikely to be successful. He said that the jurisdictions have to do this by 2020.