Some of the world’s most infamous secrecy jurisdictions, such as the British Virgin Islands and Jersey are considering becoming more transparent, whereas several G8 countries lag behind, said campaigners today. A new report,  published by Global Witness and Christian Aid today on the eve of a meeting between the UK government and the heads of the Overseas Territories, grades each of the G8 countries and the UK’s tax havens as to how easy it is to find out the names of the ‘beneficial owners’ of companies – the people who ultimately own and control them.
“Tax dodgers, child traffickers, corrupt politicians and other money launderers all rely on the use of anonymous shell companies to hide their identity,” said Rosie Sharpe, Senior Campaigner at Global Witness. “To tackle this sort of financial crime, the names of the beneficial owners of companies need to be made public for all to see.”
Abuses of anonymous shell companies have received high-level political attention recently. At the G8 summit in June 2013 all the G8 countries as well as the UK’s Crown Dependencies and Overseas Territories produced plans to tackle hidden company ownership. Some are better than others. Those places that promise more transparency deserve recognition, whereas the places that have not yet embraced this move towards greater transparency deserve exposure.
LONDON – Global Witness joins Members of Congress and investors representing more than US$5.6 trillion in assets in calling on the US Securities and Exchange Commission (SEC) to re-issue a strong ruleunder Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act—a vital piece of bipartisan US transparency legislation.
Specifically, Section 1504 requires U.S.-listed oil, gas and mining companies to publish details of their revenue payments to governments, such as taxes, royalties and licence fees, on a country- and project-level basis so that citizens in resource-rich countries can ‘follow the money’ and ensure it is used for their benefit.
Money launderers, corrupt politicians, terrorists, arms traffickers, drug smugglers, and tax evaders all rely on two things to move their dirty money: company structures that allow them to hide their identity, and banks and other professionals willing to do business with them. Both are all-too available.
This Global Witness briefing explains the problem of hidden company ownership, the ease with which the corrupt can set up anonymous companies and trusts, and how this is a major barrier in the fight against poverty. With this issue quickly rising up the political agenda, this briefing also explains what can be done to combat this problem.
LONDON – Prime Minister David Cameron revealed today that the UK will be seeking action from the G8 to end the abuse of anonymous shell companies. He has called for information about who ultimately owns and controls companies (beneficial ownership) to be registered and made publicly available.
LONDON – The massive cache of leaked documents demonstrates how hidden ownership of shell companies facilitates corruption, tax dodging and other crimes. Mr. Cameron has made a welcome promise to make tax and financial transparency priority issues at the meeting of G8 leaders in Northern Ireland this June.
LONDON – A new investigation by Global Witness today reveals the systemic corruption and illegality at the heart of government in Sarawak, Malaysia’s largest state. A film, shot undercover during the investigation, reveals for the first time the instruments used by members of the ruling Taib family and its local lawyers to skirt Malaysia’s laws and taxes, creaming off huge profits at the expense of indigenous people and hiding their dirty money in Singapore.
LONDON / WASHINGTON DC – The British bank, HSBC, made a $20.6bn profit in 2012 and paid its CEO a $3m bonus, it was announced today. This is in spite of the fact that HSBC was fined a record $1.9bn for doing business with Mexican drug lords, terrorist financers and pariah states.
LONDON – The Observer alleged today that one of the key companies involved in the horsemeat scandal was set up such that it hid the names of the people who own and control it. “This illustrates why hidden company ownership is such a problem,” said Rosie Sharpe, campaigner at Global Witness. “Criminals – whether they be fraudsters passing horsemeat off as beef, arms dealers fuelling wars, or corrupt dictators nicking their country’s wealth – need to hide their identities, and at the moment it’s all too easy to do this by setting up a company.”
LONDON – Norwegian state-owned oil company Statoil has formally distanced itself from a U.S. oil industry lawsuit that seeks to scrap a landmark transparency and anti-corruption law established in the United States.
LONDON – As the scandal grows around a Nigerian oil deal involving Shell and Italian firm Eni who made a US$1.1 billion payment that ended up in the accounts of a company controlled by a corrupt former Nigerian Oil Minister, the Dutch government is coming under increasing pressure to stop supporting opt-outs in new EU legislation that would enable companies such as Shell to avoid having to publicly report these payments in certain circumstances.
BEIJING – The Shanghai Stock Exchange (SSE) has the potential to play a greater role in improving extractive company transparency and disclosure and build on its existing social responsibility and corporate governance measures, said Global Witness and Syntao in a new report published today.
LONDON – Today, Europe’s largest bank, HSBC, announced that it will pay $1.9 billion (£1.2 billion) to settle allegations that it laundered money for drugs cartels, terrorists and pariah states. During approximately the same period that HSBC failed to check whether the dollars it was shipping from Mexico to the US were drugs money, 47,000 people died at the hands of Mexican drugs traffickers.