On “shrouds of secrecy” and political will

Here’s an extract from a letter David Cameron sent to the British Overseas Territories – ‘our’ tax havens – in April 2014:

Capture

Well put. Sunlight is the best disinfectant. “Tax evasion and illicit finance” are scourges. They need to be addressed, and “urgently”. And transparency is “vital” to meeting to those challenges.

As a BIS paper produced under the Coalition put it (in respect of plans for our own registry):

Capture

And as Cameron reportedly said, speaking in Singapore this July:

Capture

Having made a world-leading commitment to tackle these issues you’d expect the Conservatives to remind us of it in the run up to the General Election. And, amid the febrile atmosphere surrounding the HSBC disclosures of thousands of wealthy tax evaders and one prosecution, they did. Cameron demanded that British Overseas Territories publish plans to create central register revealing companies’ ultimate owners by November. This month.

Of course, the General Election has now come and gone.

So how now press upon the Prime Minister the concerns that so troubled him then?

What’s happened?

In response to a written question from Margaret Hodge, James Duddridge, the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs yesterday said this.

Capture

Or, in a word, nothing.

The UK does possess the power to force our tax havens to adopt this measure – at least that’s what an article in the highly respected New Law Journal concluded. It’s just a matter of political will. Which seems to be in rather shorter supply after the General Election than it was before it.

When, back in March, Cameron renewed his demands to the British Overseas Territories, the International Financial Centres Forum – a lobby group for British Overseas Territories – said the demands were “clearly politically driven given the timing.”

Sadly, events have shown it to be right.

Thanks to @davidtpegg for alerting me to the James Duddridge statement.

 

 

 

7 thoughts on “On “shrouds of secrecy” and political will

  1. the British Overseas Territories – ‘our’ tax havens

    …except for the three that aren’t Overseas territories (Jersey, Guernsey, Isle of Man) which are Crown Dependencies.

  2. Seeing as one of the four freedoms that the EU Treaties proclaim is freedom of movement of capital then the political will must also come from the EU ? The breadth of movement contains not only the EU member states but also some of the member states’ overseas territories and/or protectorates……good ol’ tax efficient ‘islands’ that they may be.
    One wouldn’t want to be seen at a disadvantage, would one ?

  3. The fourth money laundering directive goes some way towards that end. The disclosure provisions on our Small Business, Enterprise and Employment Act 2015 go somewhat further.

  4. Plainly they don’t go as far as Cameron thought necessary pre election…

  5. The nature of the relationships between the UK and the OTs, on the one hand, and the UK and the CDs, on the other, differs (and it differs within each grouping too on a territory by territory basis), but ultimately the same point applies. As the latest UK country report notes for the new Financial Secrecy Index:

    “. . . The vague nature of political relations between
    Britain and its OTs and CDs is extremely
    convenient for the City of London and for the
    tax havens: each claimed their dependence
    on Britain or independence from it, as it suits
    them, and Britain often claims ‘there is nothing
    we can do’ when scandal hits – though this is
    untrue. The bare truth is that Britain controls
    these places: all their secrecy-related (and
    other) legislation has to be approved in London,
    and Britain can step in and impose direct rule
    when it wants to, as it did in the Turks & Caicos
    in 2009. As a top BVI legal expert told us in a
    telephone interview, London has “complete
    power of disallowance” of legislation. What
    has generally held Britain back from intervening
    is political will.

    Yet beneath this headline there are, of course,
    many subtleties.”

    http://www.financialsecrecyindex.com/PDF/UnitedKingdom.pdf

  6. I was addressing the point that the EU needs to do something on transparency. It has. No doubt it could do more.

    I’m not going to explain the peculiar and differing relationships of the various UK CDOT jurisdictions to the EU here, but no, most EU directives or UK legislation is not automatically implemented there (and I am sure the position of the overseas territories of other EU member states is in the main somewhat similar). Bottom line is that the UK is trying to do its bit here – although you are right to hold their feet to be fire on their pre-election commitments. We need similar commitments from other OECD and G20 countries.

    SBEEA and the directive only passed recently. Lets see how they work out.

  7. Let not forget that it isn’t just tax fraud that such money laundering is good for, how else does ISIS move funds from it oil and antiquaries sales? But of course Mr Cameron would rather crack down on chat apps instead of deal with the real issue.

Comments are closed.