London, 4th December 2018 - The UK government should require its Crown Dependencies to bring in public registers of company owners to match reforms in its Overseas Territories, said Global Witness today. The call comes as delegates from its Overseas Territories arrive in the UK to discuss the historic measures with government ministers.
In April 2018, the UK government committed to ensuring the Overseas Territories create such registries by 2020, a move heralded as a breakthrough in the fight against corruption, tax dodging and money laundering. So far, it has not made the same demand of its Crown Dependencies - which are also secrecy jurisdictions, just closer to home - despite the fact that they are also known hotspots for money laundering and tax evasion.
At the International Anti Corruption Commission (IACC) in October, the UK government announced that it is launching a campaign for global beneficial ownership transparency. For this to be taken seriously, the UK must ensure all its jurisdictions play by the same rules.
“The UK government’s decision to publish public registers of the real owners of companies in the Overseas Territories is a huge step forward in the fight against corruption, tax dodging and money laundering. But before the government can credibly position itself as a global leader on this issue, it must clean up its own backyard - that means opening up the Crown Dependencies in the same way,” said Ava Lee of Global Witness.
Dame Margaret Hodge MP and Rt Hon Andrew Mitchell MP - who chair the All Party Parliamentary Group on Responsible Tax - today visit Jersey, a Crown Dependency which Hodge recently rebuked for “funnelling dirty money”.
“The outrageous practices of these offshore tax havens mean global corporations avoid paying their fair share of tax. This threatens under-funded public services in the UK as well as being detrimental to developing countries. The Crown Dependencies must put in place public registers. If not we will campaign for them to play by the same rulebook as the Overseas Territories and the UK,” said Hodge.
The Prime Minister of the Cayman Islands has recently signalled he wants to challenge the UK’s constitutional relationship with the UK to evade the reforms. Global Witness is calling on the Foreign Office to stand by its proposals and support the Overseas Territories as they move toward clean business models.
“The government must hold firm and see this through - it’s firmly in our national interest. Over the last ten years, £68 billion has been invested in the Overseas Territories from Russia alone - a large swath of which are the proceeds of crime and corruption. We need to stem that tide,” said Lee.
Ava Lee, Senior Campaigner, Anti-Corruption
- In 2018, the UK government voted for transparency by agreeing to push the UK’s Overseas Territories to publish public registers of the real owners of their companies.
- The UK led the world by creating the first fully open register of the people who own and control UK companies in 2016. However, this analysis by Global Witness finds that the real people behind thousands of companies are still going unidentified and data is not subject to sufficient scrutiny.
- UK Overseas Territories could launch legal challenges to the British initiative to open up public ownership data.
- Previous research has shown that five times more Russian money is held in UK tax havens than in the UK itself.
- The Crown Dependencies’ record for anti-money laundering is not as effective as they would have us believe, as we discuss in this blog.
Cleaning up closer to home – why the Crown Dependencies need to go public
Ministers from the Overseas Territories will be meeting with the Foreign Office to discuss the creation of public registers of the real owners of anonymous companies.
The Companies We Keep
What the UK's open data register actually tells us about company ownership
European Getaway: Inside the Murky World of Golden Visas
How mismanaged ‘Golden Visa’ schemes are enabling corruption on an unprecedented scale, and what EU institutions must do about it