The UK joined the Cayman Islands and other countries on Thursday in announcing plans for new measures aimed at boosting existing laws against corruption and tax evasion, as the first-ever global anti-corruption summit got under way in London.
The summit, which had been called by UK prime minister David Cameron in the immediate aftermath of the leak of some 11.5 million confidential documents by a Panamanian law firm, is bringing together leaders from a range of countries, including – as Cameron was overheard to have pointed out to the Queen, in remarks for which he was subsequently criticised – representatives from “fantastically corrupt” Nigeria.
(Nigerian president Muhammadu Bhuhari, who was elected last year on an anti-corruption platform, indirectly responded to Cameron’s remarks in a speech in London yesterday in which he noted that corruption “does not differentiate between developed and developing countries”, and called for the creation of a new, “international anti-corruption infrastructure”).
Politicians from more than 40 countries, along with World Bank and IMF representatives, were scheduled to attend the conference.
Among the key measures to emerge from the summit was a new package of new rules that will hold banks and other multi-national entities doing business in Britain “criminally responsible” for employees who embezzle funds, launder money, evade tax and otherwise engage in fraud.
The new rules would give such agencies as the Serious Fraud Office new powers to pursue large companies in connection with cases of corruption and “economic crime” in ways that they currently are unable to.
Beneficial owners of UK property
Separately, Cameron is introducing a new requirement for the beneficial owners of all foreign companies that own UK properties to be revealed. This new rule has long been campaigned for by British transparency advocates, including the British satirical publication Private Eye, and would affect companies wishing to buy UK property in the future as well as those that already own it. Companies interested in applying for a government contract also would need to provide this information.
According to Government figures, foreign companies currently own around 100,000 properties in England and Wales, of which more than 44,000 are in London.
In a statement, the Government said the register “will mean corrupt individuals and countries will no longer be able to move, launder and hide illicit funds through London’s property market, and will not benefit from our public funds”.
Other measures announced during the summit included an agreement by some 40 jurisdictions, including what the Government said was “a number of Overseas Territories and Crown Dependencies with major financial centres” to automatically share beneficial ownership information. This, the Government noted, would for the first time enable police and law enforcement officials to be able to see “exactly who really owns and controls every company incorporated in these jurisdictions”.
Also included on the UK Government’s list of measures it plans to take:
• France, the Netherlands, Nigeria and Afghanistan will follow the UK’s lead and commit to launch their own public registers of true company ownership, while Australia, New Zealand, Jordan, Indonesia, Ireland and Georgia will agree to take the initial steps towards making similar arrangements. The UK will launch its own fully public register next month – “the first G20 country to do so”, according to the Government.
• The UK will create what it says will be the world’s first-ever “International Anti-Corruption Coordination Centre”, to be based in London, in partnership with the US, Canada, Australia, New Zealand, Switzerland, and Interpol. “Experts, including from the National Crime Agency, will provide international co-ordination and support to help law enforcement agencies and prosecutors work together across borders to investigate and punish corrupt elites and recover stolen assets”, the Government said.
As reported, the US Department of the Treasury last week unveiled a package of new measures, including requiring companies to register their beneficial ownership information, that it said were aimed at countering money-laundering, corruption and tax evasion, after months of criticism over America’s growing status as a defacto “tax haven”.
As the corruption summit got under way, meanwhile, news broke that the law firm at the centre of the “Panama Papers” data leak – which had led UK prime minister Cameron to call for the summit to be held – was filing suit against the International Consortium of Investigative Journalists for its role in disseminating that data.
In a statement, Panama’s Mossack Fonseca, which earlier had sought unsuccessfully to prevent it from posting the searchable database based on the leaked documents on Monday, said it had been “forced… to start aggressive legal action” against the ICIJ.
To read Jersey Finance chief executive Geoff Cook’s thoughts on the dangers that can lie in making too much of the wrong kind of financial information available to the public at large, click here.
To read London-based, UK non-dom expert Mark Davies’ thoughts on the possible security risks that could lie in being named in the Panama Papers, click here.