From Ekklesia

UK tax havens have come under new pressure to end their extreme financial secrecy after the European Union moved last week to shine a light on who really owns millions of companies.

“Europe’s decision to create national registers of companies’ real owners greatly increases the pressure on UK-controlled tax havens such as the British Virgin Islands and the Cayman Islands to follow suit”, said Joseph Stead, Senior Economic Justice Adviser at Christian Aid, the UK-based churches’ global development agency.

“As Europe and the UK itself take major steps towards transparency, it makes the extraordinary secrecy of the UK’s tax havens look more indefensible than ever. It also makes things more embarrassing for David Cameron, who told the Overseas Territories in April to make quick progress on transparency, only to be ignored.”

A fortnight ago Cayman Islands Premier Alden McLaughlin announced that all the Overseas Territories and Crown Dependencies will ignore David Cameron and continue to allow the owners of shell companies registered in their jurisdictions to hide in the economic shadows.

Mr Stead added: “Premier Alden McLaughlin claimed that the Overseas Territories would not move until other countries did. We now have the 28 members of the EU committed to creating central registries with a degree of public access, so that excuse doesn’t work anymore.”

Christian Aid’s welcome of the EU decision is qualified by the fact that although European countries have agreed to create national registers of the people who own and control companies, public access will be restricted to those with a ‘legitimate interest’.

The registers are important for catching up with criminals who use anonymous shell companies for crimes including tax evasion, corruption, fraud, money laundering and even terrorist financing.

Joseph Stead said: “While the European agreement is not perfect, not least because the chance to restrict public access will reduce the registers’ crime-fighting power, this is still a significant step forward in the increasingly inevitable move towards public registers of companies globally”.

The European move against company secrecy is the result of an agreement between the European Parliament and Council of Ministers, reached yesterday. . The deal will be implemented through an amendment to the EU’s Anti-Money Laundering Directive.

The colour red dominates a recent ‘traffic light assessment’ of UK tax havens’ progress towards company transparency, released by Christian Aid and Global Witness last month.

For more on this story go to: http://www.ekklesia.co.uk/node/21214