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Campaigners give onshore and offshore secrecy jurisdictions the red light

25th November 2013

Some of the world’s most infamous secrecy jurisdictions, such as the British Virgin Islands and Jersey are considering becoming more transparent, whereas several G8 countries lag behind, said campaigners today.  A new report, [1] published by Global Witness and Christian Aid today on the eve of a meeting between the UK government and the heads of the Overseas Territories, grades each of the G8 countries and the UK’s tax havens as to how easy it is to find out the names of the ‘beneficial owners’ of companies – the people who ultimately own and control them.

“Tax dodgers, child traffickers, corrupt politicians and other money launderers all rely on the use of anonymous shell companies to hide their identity,” said Rosie Sharpe, Senior Campaigner at Global Witness.  “To tackle this sort of financial crime, the names of the beneficial owners of companies need to be made public for all to see.”

Abuses of anonymous shell companies have received high-level political attention recently.  At the G8 summit in June 2013 all the G8 countries as well as the UK’s Crown Dependencies and Overseas Territories produced plans to tackle hidden company ownership.  Some are better than others.  Those places that promise more transparency deserve recognition, whereas the places that have not yet embraced this move towards greater transparency deserve exposure.

Only the UK and France have been awarded the top grade of ‘green’ as they have committed to make beneficial ownership information public.  The other results, however, do not divide into ‘onshore’ countries getting good marks and ‘offshore’ jurisdictions getting poor marks.  Quite a few of the tax havens are running, or have committed to run, consultations on whether to make beneficial ownership information public, including the British Virgin Islands, Cayman Islands and Jersey.  Half of the G8 countries – Germany, Canada, Russia and Japan – however, get the lowest grade, a ‘red’.  The US – which is the most popular jurisdiction of choice for the corrupt [3] – gets the second lowest grade, an ‘orange’, for having committed to push legislation that would create private registries.  The administration now needs to see through this commitment. 

“Thinking about making company ownership transparent and actually doing it are of course two very different things.  Once the consultations are concluded, we will be adjusting the grades accordingly – up if they promise to make company ownership information public, down if not. Our hope is to see a race to the top.  Without this, companies will continue to be used to evade taxes and steal money from some of the poorest people on the planet,” said Joseph Stead, Senior Economic Justice Advisor at Christian Aid. 

/Ends

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Notes to editors:

[1]  On 25 and 26 November 2013 there is a meeting of the ‘Joint Ministerial Council’ taking place in London – an annual meeting of all the leaders of the Overseas Territories, plus UK ministers. https://www.gov.uk/government/topical-events/overseas-territories-joint-ministerial-council

[2]  Company Ownership: which places are the most and least transparent can be downloaded for free from the link below, or at www.christianaid.org.uk

[3]  A report by the World Bank’s Stolen Asset Recovery Initiative looked at more than 200 cases of grand corruption.  In 70% of the cases, a company was used to facilitate the crime, and the most popular jurisdiction to incorporate those companies was the US, followed by the British Virgin Islands.  http://star.worldbank.org/star/publication/puppet-masters