Blog / March 30, 2015

UK leads way on ending company secrecy with new law and pressure on the British tax havens

For 20 twenty years Global Witness has been following the money trails behind cases of grand corruption around the world. Our efforts our often frustrated when the money disappears into an anonymously owned company in the British Virgin Islands, Delaware or the UK. The key is much more transparency over who really owns and controls companies.

Last week, legislation received final approval in the UK to create the world’s first publicly-accessible register of who really owns and controls companies – known as the beneficial owners. This was a big achievement, although there are still loopholes, as pointed out by our colleagues at Christian Aid.

However, the problem won’t be solved by transparency in just one country, and Global Witness is campaigning for other places to adopt similar registers.

Beach image

We are starting to see real progress. Over the weekend, the Financial Times reported that the UK government has told the British Virgin Islands and Cayman Islands to set out how they’re going to create central registers, or similar systems, by November. This is a big step forward, as the British tax havens have repeatedly refused to take such steps (see herehere and here).

However, what’s not clear is whether these registers will be open to the public, in line with what’s happening in the UK. Ed Miliband, the head of the opposition Labour party in the UK, has promised that he would force the tax havens to create central registers, and make them publicly-accessible.

All of this raises pressure on the United States, which according to one study is the second easiest place in the world to open an anonymous company. As Joshua Simmons from Global Financial Integrity points out: “The White House has repeatedly endorsed the need for legislation to ensure that beneficial ownership information on all U.S. companies is available (at least) to law enforcement, but action has been slow to follow that commitment. Action has been painstakingly slow.”

The momentum is clearly building, but we have a long way to go.

Photo credit: Trey Ratcliff / Creative Commons