Secrecy in BOTs fuelling corruption, says report

| 30/11/2015 | 5 Comments

Tax haven(CNS Business): A new report released by a coalition of NGOs, including Transparency International UK, has described some of the British overseas territories (BOTs) as “some of the most notorious purveyors of financial secrecy”, despite promises about more transparency. The authors say a World Bank study found that BOTs are the most popular jurisdictions for the corrupt to incorporate a company.

The World Bank reviewed 213 cases of corruption over a thirty year period up to 2010 and companies domiciled in the BVI and the Cayman Islands were described as “the biggest problems”.

The controversial findings come at a time when the Cayman Islands and other offshore financial centres are coming under pressure from the UK government to introduce direct access to beneficial ownership details of companies listed here and just as the Cayman delegation arrives in London for the Overseas Territories Joint Ministerial Council (JMC).

Premier Alden McLaughlin, Financial Services Minister Wayne Panton and other government officials flew to London on Friday for the annual meeting between the leaders of the overseas territories and the Foreign and Commonwealth Office. Before leaving, McLaughlin said that he would be meeting the BOT minister, James Duddridge, regarding his demands that Cayman allow the UK authorities direct access to all company information here. The premier also stated that Cayman would not allow such access and he committed to resisting pressure to allow any kind of central or public register of beneficial owners until it becomes the industry norm.

British Prime Minister David Cameron has committed to addressing transparency in the financial sector at home and in the territories. But the report, “The UK’s Corruption Problem”, said that, despite the progress, the extent to which banks and other financial accounts can still be hidden from tax authorities allows people to hide corrupt cash and avoid tax, and that no data had yet been exchanged under the new automatic exchange regime.

While Montserrat has become the first of the BOTs to promise to put the names of the people who own and control companies into the public domain and Gibraltar, by virtue of being a member of the European Union, will also have to make the names of beneficial owners available, no other territory has yet agreed to do so.

Joseph Stead from Christian Aid, one of the NGOs involved in the report, said, “With David Cameron planning to host an anti-corruption summit in 2016, now is the time to change things and demonstrate that the UK is as committed to stamping out corruption in its backyard as it is elsewhere in the world.”

The Tax Justice Network said there has been a lot of talk about beneficial ownership but there has not yet been enough action.

See the full report: The UK’s Corruption Problem

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Category: Finance, Financial Crime, Financial Services

Comments (5)

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  1. Anonymous says:

    Thanks CNS, right at the beginning of the Cayman Captive Forum week. A great advert for the industry which could well lead to job losses if people pull out of here. A lot of us in FS are regulated not only by CIMA but by internal regulation and audit, and God help us if we get something wrong or miss a clue that someone is not who they say they are. I heard of one case where a seemingly respectable and smart business man from the US did try to bamboozle his advisors, but fortunately they got wind of it. It happens everywhere, not just here, and we never had an Enron or Madoff or anything of that scale here (and I pray we don’t). Do we need to be on our guard? Yes of course. Do we need to constantly up our game? of course we do! Should our politicians stand up and defend us? Yes!! Why don’t these same idiots write about where the biggest scam happen, such as the US, and other so called world leaders? I will tell you why. Because those countries will bite back.

    • Anonymous says:

      Enron, a fraud facilitated by use of Cayman vehicles. Madoff, a fraud facilitated by the use of Cayman vehicles. Just sayin’.

  2. Anonymous says:

    When City of London and America clean up their act, only THEN can they look at Cayman: http://www.theguardian.com/politics/2015/nov/02/united-states-overtakes-caymans-singapore-tax-haven-financial-secrecy-index

    • Anonymous says:

      But the City and the US have overall positive utility in world finance. The more parasitic secrecy havens cannot say the same.

  3. Anonymous says:

    Very few of the major world frauds in the last decade did not involve money being funnelled through companies in the BOTs.

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