The UK just made it harder for the corrupt to hide their wealth offshore

The UK just made it harder for the corrupt to hide their wealth offshore

From the Lava Jato scandal  to the Panama and Paradise Papers, time and again we’ve seen how offshore territories - often known as secrecy jurisdictions or tax havens - play a key role in facilitating the illicit flow of money across borders.

Some of the most notorious of these are among Britain’s Overseas Territories.

In fact, if counted together, the United Kingdom and its Overseas Territories and Crown dependencies would top the Financial Secrecy Index, given the staggering scale of their undisclosed financial activities.

But, fortunately, this could soon change.

On 1 May 2018, the UK Parliament voted in favour of requiring any British Overseas Territory that has not already done so to introduce public registers that reveal the individuals behind companies based there by the end of 2020.

This is a major victory in the fight against cross-border corruption.

Why does it matter?

In 2015, research by Transparency International UK (TI-UK) found that shell companies registered in secrecy jurisdictions were involved in more than three quarters of corruption cases involving property that were investigated by London’s Metropolitan Police. Of these companies, nearly 80 per cent were registered in the UK’s Overseas Territories, like Bermuda, the Cayman Islands and the British Virgin Islands, or in Crown dependencies, like the Isle of Man or Channel Islands.  

Last year, TI-UK identified £4.4 billion worth of property in the UK bought with suspicious wealth. Of the companies used for these transactions, nearly half are based in the British Virgin Islands.

And just last week, a BBC Panorama investigation conducted together with TI-UK and the Organized Crime and Corruption Reporting Project (OCCRP) published details of a Ukrainian crime gang that purchased eight luxury properties in London using companies registered in the British Virgin Islands.

More progress needed

Even while celebrating this week’s ruling in the UK, it is important to note that the Crown dependencies are not yet affected.

More widely, our report published in April looked into precisely this problem of opaque beneficial ownership systems, focusing on how far G20 countries in particular have gone in removing the anonymity that allows criminals and the corrupt to hide their identity behind shell companies. The world’s leading economies still have a lot of work to do to live up to their own principles. None apart from the UK have public registries of beneficial ownership for companies operating within their borders.

The UK’s tough new stance on offshore financial secrecy should inspire others to follow suit

Image: Creative Commons, Unsplash, Anders Wideskott  

For any press enquiries please contact press@transparency.org

Latest

Support Transparency International

Support Us

What people think: corruption in the Middle East & North Africa

Momentum has been building against corruption for years in the Middle East and North Africa. From Lebanon and Sudan, where millions of people took to the streets earlier this year to speak out against their governments, to the Arab revolutions that toppled corrupt leaders nearly a decade ago, people are fed up with rampant corruption across the region.

Wasta: How personal connections are denying citizens opportunities and basic services

In many Arab countries the use of personal connections, or “wasta” in Arabic, is a common practice and a social norm. People use their family or social contacts to skip the line and gain quicker and better access to basic goods and services. How much you can increase the speed and quality of your service often depends on who you know – the higher the better, of course.

Sextortion: Middle East and North Africa

Sextortion is one of the most significant forms of gendered corruption and although women’s rights have advanced unevenly across the Middle East and North Africa, positive momentum has been building in the region over the last decade.

Lack of political integrity is undermining trust in democracy in Middle East and North Africa

The Global Corruption Barometer – Middle East and North Africa 2019 reveals that leaders in the region are perceived as acting in their own self-interest at the expense of the citizens they are meant to serve. This has serious consequences for trust in democratic institutions.

آراء المواطنين:  الفساد في منطقة الشرق الأوسط وشمال أفريقيا

لقد تزايد زخم التنديد بالفساد خلال السنوات الماضية في منطقة الشرق الأوسط وشمال إفريقيا. وضاق الناس ذرعا بالفساد المستشري في مختلف أنحاء المنطقة، من لبنان والسودان، حيث خرج ملايين الناس إلى الشوارع في مطلع هذا العام للتنديد بصوت عال بممارسات حكوماتهم، إلى الثورات العربية التي أطاحت بالزعماء الفاسدين منذ زهاء عشر سنوات.

الرشوة الجنسية: منطقة الشرق الأوسط وشمال إفريقيا

على الرغم من تفاوت التقدم المُحرز على مستوى حقوق المرأة في مختلف أنحاء الشرق الأوسط وشمال إفريقيا، شهدت المنطقة زخما إيجابيا تنامى تدريجيا خلال العقد الماضي. إذ أصبح عدد أكبر من النساء يُعبّرن عن أنفسهن داعيات إلى تعزيز تمثيل المرأة في الحكومة وتجريم العنف المنزلي وتحقيق المساواة في الحقوق للنساء والفتيات، إلى جانب عدد من المسائل الأخرى التي تهم المرأة. وتُناضل النساء في مختلف دول المنطقة من أجل إعلاء كلمتهن.

حرمان المواطنين من مختلف الفرص والخدمات الأساسية  بسبب استغلال آخرين لعلاقاتهم الشخصية

يُعتبر استغلال العلاقات الشخصية في البلدان العربية، أو ما يُعبّر عنه بالواسطة، مُمارسة منتشرة ومُتعارف عليها اجتماعيا. إذ يستغل مختلف الأشخاص علاقاتهم الأسرية أو الاجتماعية لعدم الوقوف في الصف وللوصول على نحو أسرع وأفضل إلى المدارس أو الجامعات أو المستشفيات أو الوظائف، و"لتعجيل" الإجراءات الإدارية في المؤسسات الحكومية مثل تجديد وثائق الهوية أو شهادات الميلاد. وتعتمد عادة سرعة حصولك على الخدمة وجودتها على الشخص الذي تعرفه؛ فبطبيعة الحال، كلما كان في منصب أعلى كان ذلك أفضل لك.

Social Media

Follow us on Social Media