The UK has shown signs of improving financial transparency in two of its overseas territories in recent weeks, but organizations fighting tax havens say they are insufficient and are demanding stronger measures.
Two years ago, the country passed an amendment to its anti-money laundering law to require its overseas territories to establish public registries of beneficiaries, to expose the true owners behind many front companies.
The Caribbean British Virgin Islands, considered by NGOs that fight corruption and money laundering as one of the most opaque financial centers in the world, were the last to comply with the order at the end of September, agreeing to publish their company registration by 2023 .
“This is great news, they were delaying it even though it is a legal obligation since 2018,” he tells AFP. Nienke Palstra de Global Witness.
According to this anti-corruption NGO, numerous scandals, from the recent FinCEN leaks to the famous Panama Papers, show that this archipelago constitutes one of the main extraterritorial centers for money laundering and tax evasion.
Alex Cobham, of Tax Justice Network, considers that although the commitment of the Virgin Islands is “welcome”, it is “weak” and rather a disguised reaffirmation of the status quo: your prime minister, Andrew Fahie, spoke of “working to” establish owner records, “with certain reservations.”
But Pasltra is optimistic and believes that the establishment of such registries “discourages” attempts to transfer money from corruption or crime there.
It acknowledges however that “the problem is the way this information is accessed” with “deadlines and fees” that can discourage applicants.
For its part, the Cayman Islands were removed this week from the European Union’s black list of tax havens, thanks to the introduction of reforms.
However, for the NGO Oxfam the removal of “one of the most famous tax havens in the world from the black list of tax havens in the EU is further proof that this procedure does not work.”
This list, designed to combat tax evasion by multinationals and large fortunes, was created in December 2017 as a result of several scandals, including the Panama Papers and LuxLeaks.
For the Tax Justice Network, the danger in the Cayman Islands lies less than in the past in the trafficking of money from crime or corruption, and more in the destabilization of the financial system.
And, recalling that the archipelago played an important role in the financial crisis of 2008, he denounces that its tax system allows “large international entities to evade taxes and regulations” of the countries in which they operate.
Transparency International, another association that fights against dirty money, denounces how financial mechanisms such as trusts, private investment funds used in particular for the assets of the super-rich, escape the records and remain opaque.
The arrival of Brexit, and with it Prime Minister Boris Johnson’s desire to regain control of British regulation, have raised concerns about a more aggressive fiscal policy on the part of the United Kingdom and its territories.
“Since the December 2019 elections”, where Johnson rolled over, “the British government has shown no visible interest in financial transparency”, in particular by revoking commitments made to the Organization for Economic Cooperation and Development (OECD) to share information about its multinationals country by country, Cobham says.
“There is a feeling that (the fight against financial opacity) is not a priority for them,” but “I don’t think we will see a slowdown” in anti-money laundering efforts, says Sarah Hall, financial specialist at The UK group. in a Changing Europe (the United Kingdom in a changing Europe).