Press Release / June 14, 2013

G8 must seize historic opportunity to end corporate secrecy and usher in an age of transparency

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G8 leaders have an unprecedented opportunity to roll back the frontiers of corporate secrecy and put a stop to the use of shell companies by money launderers, corrupt politicians, drug runners and tax evaders to hide dirty money and disguise their identities, Global Witness said today ahead of the G8 summit in Northern Ireland.

The UK Prime Minister, David Cameron, laid out an ambitious agenda for the UK G8 Presidency. He is putting “trade, tax and transparency” at the heart of the international business and development agenda, has promised to “knock down the walls of corporate secrecy” and has said he will “push for more transparency on […] how gas, oil and mining companies operate.”

Negotiations are going down to the wire. Certain G8 countries, including Canada, Germany and Russia, are reportedly less keen to commit to the key step of collecting and publishing the names of companies’ ultimate or ‘beneficial’ owners. The US and Canada are currently among the easiest places in the world to form an anonymous company. The UK is also seeking action on these issues with its crown dependencies and overseas territories.

“Corrupt politicians, tax evaders, terrorists and drug traffickers all use shell companies to move dirty money and hide their identities,” said Gavin Hayman, Director of Campaigns for Global Witness. “The UK deserves credit for championing this agenda: it is the first time that any government has made a coherent effort to address abuses of anonymous shell companies and to roll back both offshore and onshore corporate secrecy.”

“By making information about who owns and controls companies public, G8 countries could make an enormous difference to the development prospects of poor countries who lose billions each year in illicit financial flows, and could help stop financial crime and fraud that harms us all.”

“Any action plans that G8 countries produce on improving information on beneficial ownership of companies should be made public as well: you can’t make transparency promises in a secret document. It’s also key that the UK’s overseas territories and crown dependencies are included in any deal, as they are home to many anonymous companies, and key facilitators of tax evasion and worse.”

Significant progress has been made on transparency in the oil and mining business with the EU passing legislation requiring natural resource companies to publish details of the payments they make to governments and Canada announcing plans to do the same. Combined with a similar law implemented in the U.S. in 2012, the EU Directives will cover around 70% of the value of the global extractive industries.

Hayman: “The new EU oil and mining payment transparency laws show that momentum towards a global standard of extractive industry transparency is now virtually unstoppable, in spite of the efforts of big oil companies such as Shell and BP to obstruct it. We should celebrate the progress made so far and encourage others to adopt the same global standard.”

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