Press release / 3 Avril 2016

Call for tax havens to open up after offshore exposé

Today’s data leak from the International Consortium of Investigative Journalists (ICIJ) lays bare the extent to which corruption, tax evasion, and other criminality is made possible by the global offshore industry. Global Witness is calling for tax havens to end the secrecy that enables this abuse.

Over 60 media outlets collaborating with the ICIJ are publishing a series of stories based on documents leaked from the prominent Panama-based law firm Mossack Fonseca.

“This investigation shows how secretly owned companies, many of them based in the UK’s tax havens, can act as getaway cars for terrorists, dictators, money launderers and tax evaders all over the world. The time has clearly come to take away the keys, by requiring the collection and publication of information on who really owns and controls these companies. This would make it much harder to launder dirty money and leave the rest of us safer as a result,” said Robert Palmer, campaign leader at Global Witness.

In over 20 years of investigations into corruption and financial crime, Global Witness has repeatedly shown how the secrecy that offshore jurisdictions sell allows corrupt officials to steal from their people (1). This kind of corruption props up abusive regimes, keeps developing economies dependent on overseas aid, and fuels instability and extremism. It is also bad for the global economy. IMF research has shown that improving financial transparency has a direct positive impact on credit ratings, (2), while  it is estimated that £33bn is lost to corruption and other financial crimes across Africa every year (3).

In May this year, the UK is hosting an international anti-corruption summit. UK Prime Minister David Cameron has a critical opportunity to pressure the UK tax havens featured in the investigation, such as the British Virgin Islands, to match the UK’s commitment to company ownership transparency. According to the World Bank, the UK’s Overseas Territories are the most popular place for the corrupt to incorporate a company (4).

The Prime Minister has spoken of the need for the UK’s Overseas Territories to open up: “Some of the British Crown Dependences and Overseas Territories are making progress in this direction. Others, frankly, are not moving anywhere near fast enough. I say to them all today, including those in this region [the Caribbean], if we want to break the business model of stealing money and hiding it in places where it can’t be seen: transparency is the answer.”(5)

The UK government has the legislative power to make this happen. Today’s news shows that without decisive action to so at the forthcoming summit, its efforts to stamp out global corruption cannot be seen as credible, nor can the summit be seen as a success by the public. 

“David Cameron has shown real global leadership in tackling corruption - he now faces a credibility test. Today’s news shows that unless the government uses the upcoming summit to force the UK’s tax havens to end anonymous company ownership, our other efforts won’t be effective in fighting poverty and instability. We have to clean up our own back yard first,” added Palmer.

/ Fin

Contacts

Oliver Courtney, Communications Manager

[email protected]

+44 (0)7912 517147

Robert Palmer

Robert Palmer, Campaign Leader, Banks and Anonymous Companies

[email protected]

+44(0) 7545645406

Infos pour les journalistes


(1) Global Witness, and others, have repeatedly exposed the role of anonymously owned companies in enabling corruption and criminality. Some examples include:

(2) Escolano, J. and Arbatli, E. (2012) Fiscal Transparency, Fiscal Performance and Credit Ratings, IMF Working Paper No. 12/156 https://www.imf.org/external/pubs/cat/longres.aspx?sk=25996

(3) See the Guardian, “Africa losing billions from fraud and tax avoidance

(4) See World Bank report “Puppet Masters: How the corrupt Use Legal Structures to Move Stolen Assets and What To Do About It”

(5) See the Guardian, “David Cameron says not enough being done to tackle tax evasion

(6) This is not just an offshore problem. In January 2016 a groundbreaking undercover investigation by Global Witness was profiled by CBS’ 60 Minutes programme, showing how the U.S. is a critical player in this global web of secrecy. 



 

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