The UK’s Overseas Territories announced last week that they would put information on the people who ultimately own and control companies – so-called beneficial owners – in centralised registries ‘or similarly effective systems’, representing a small step towards greater transparency. However, the territories have declined to match the UK’s commitment to make beneficial ownership information public.
“The UK’s Overseas Territories lie at the heart of the global secrecy industry; companies registered here are the most abused in the world,” said Rosie Sharpe, campaigner at Global Witness.
A study by the World Bank into more than 200 cases of grand corruption concluded that companies from the UK’s Overseas Territories are most popular with the corrupt.
“Creating centralised registries of company ownership is a small step forward but it falls short of what is needed. The information must be fully public,” said Sharpe.
“This measure may help the UK track down tax evaders and the corrupt, but what about the rest of the world? The only way for tax inspectors and law enforcement to easily know that someone is hiding money in a bank account that belongs to a company is for information on the people who own and control companies to be public,” said Sharpe.
One of the Overseas Territories, Montserrat, recently announced that it will make information on beneficial owners public, albeit not online and for a small fee.
“David Cameron is hosting an anti-corruption summit next May. But the UK will lack credibility in calling for other countries to get better at tackling corruption when its own backyard remains shrouded in secrecy. We need a fully public register,” said Sharpe. “David Cameron said that he would continue to make the case to the Overseas Territories for company ownership transparency. Private centralised information is not a transparency measure.”
In addition to falling short as a result of not making beneficial ownership information public, there are also concerns that:
• No timetable is set out.
• The communiqué allows the Overseas Territories to create ‘similarly effective systems’ but does not define what this means.