24 April 2015

British Elections Hold Key to Shape of Corporate Transparency in U.K. Territories

U.K. elections in May aren’t likely to spare British territories from implementing new corporate transparency measures, but the results could determine how soon and how far those steps are taken.

In March, British lawmakers formally adopted a plan to create a centralized and public database identifying the beneficial owners of U.K. corporations and trusts. The initiative, announced by Britain in 2013 at the G-8 summit in Northern Ireland, is intended to scale back the exploitation of shell companies by financial crooks.

Prime Minister David Cameron further called on U.K. territories and crown dependencies to adopt similar controls, either by creating public registers that name corporate owners or launching non-public databases accessible only to approved officials for regulatory and investigative purposes.   Labour Party leader Ed Miliband recently warned the nine territories and dependencies that, if elected, he would give them six months to create public registers before recommending their inclusion on a blacklist of tax havens maintained by the Organisation for Economic Cooperation and Development (OECD). 

However, progress has been mixed with some overseas territories so far rejecting public registers.  The territories “will argue that it’s fair for them to continue to allow privacy, provided that they keep registers which are private and accessible only to the enforcement authorities” though “much will depend on the political climate,” said Kate Higgins, legal director of London-based law firm Mischon de Reya.

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