UK Prime Minister David Cameron will pledge on Thursday to make public a registry that names the true owners of British companies, marking a significant crackdown on the use of shell companies to evade taxes and maintain financial secrecy.
This central registry will reveal the flesh-and-blood owners of UK companies, in addition to the legal ownership information that companies currently provide Britain’s Companies House.
Cameron promised in June to create a “beneficial ownership” registry in the UK, but had not decided whether it would be open to the public or only to law enforcement and tax authorities. A corporation’s “beneficial owners” are the real people who ultimately benefit from the company’s activities and assets.
Putting the public registry in place will require approval of legislation by UK’s Parliament.
Since the April launch of its Offshore Leaks investigation, the International Consortium of Investigative Journalists has exposed widespread tax avoidance and financial secrecy across the globe. The revelations that prominent politicians, business leaders and criminals are among the owners of more than 120,000 secret offshore companies revealed by ICIJ have sparked responses around the world, including newfound determination in Europe to crack down on global tax dodging.
“[Offshore Leaks] really raised the issue of tax evasion and tax avoidance and the especially the role of hidden shell companies,” said Robert Palmer, an advocate with the nonprofit group Global Witness. “ICIJ can definitely claim some credit” for the UK’s latest transparency move.
The registry will include companies in the UK but not in the UK’s overseas territories and dependencies, which include noted offshore tax havens such as the British Virgin Islands, Jersey and Guernsey. Unlike the UK, neither the United States nor the European Union has announced plans to require public disclosure of company ownership.
The UK Prime Minister’s office said the decision to make the registry public represented the next step in the global campaign to crack down on tax evasion. A spokeswoman for 10 Downing Street said the UK had urged both its overseas territories and its allies in the G8 to take similar measures, and would continue to do in future.
“We are now looking to lead the debate by saying this should be made public,” said the spokeswoman.
In remarks prepared for Thursday’s announcement, Cameron said that the disclosure requirement would benefit all legitimate stakeholders.
“It’s better for businesses here – who will be able to better identify who really owns the companies they’re trading with,” Cameron is expected to say. “It’s better for developing countries – who will have easy access to all this data without submitting endless requests for each line of enquiry. And it’s better for us all to have an open system which everyone has access to.”
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