NGOs: UK could end era of tax havens

As David Cameron opened the anti-corruption summit in London on Thursday, everyone seemed to be on the same page.

"Corruption is the cancer at the heart of so many of the world's problems," the British prime minister wrote in an editorial for the "Guardian" newspaper. "The longer I have been in this job, the more I have come to the conclusion that the things we want to see - countries moving out of poverty, people benefiting from their nation's natural resources, the growth of genuine democracies - will never be possible without an all-out assault on corruption."

He went on to back these words by announcing Britain's new anti-corruption initiatives: including a new "failure-to-prevent clause" covering fraud and money laundering (making companies liable if employees are caught money laundering), a commitment to sign an open data partnership, and a new law forcing foreign companies that own property in the UK to disclose who controls them.

Perhaps the most promising of these announcements, though, was the public register of company ownership, which will see the UK and 33 other governments "agreeing to automatically and regularly share their entire list of company ownership with each other." "This is huge progress," Cameron boasted.

UK a corruption facilitator

The UK has good reasons to make such assurances ahead of the summit it is hosting, given the number of potential sources of embarrassment, a few of which popped up even before the summit began.

Last month, Cameron was forced to admit that he profited from his father's offshore trust in Panama - a disclosure from the so-called Panama Papers. But this week it was revealed that Panama was not invited to the conference - because, according to the UK government, it has not shown enough willingness to tackle corruption.

Then on Tuesday, Cameron was caught on a live microphone telling the British queen that one of the attendees, Nigeria, was "fantastically corrupt," while failing to point out to the monarch that the UK's overseas territories often facilitate corruption in Africa.

"The money that goes missing from Nigeria is often laundered through British Virgin Island shell companies," said Rosie Sharpe, senior campaigner at the anti-corruption group Global Witness. "And the dirty Nigerian money often ends up being used to buy big mansions in expensive parts of London."

Tax haven crackdown

Max Lawson, head of inequality policy at aid agency Oxfam, was equally withering about the UK's position: "The UK is largely in control of about a third of the world's tax havens - the queen is on the banknotes of countries like the British Virgin Islands, the Cayman Islands, Bermuda - these are places where billions of dollars are hidden, and David Cameron has effective control over them."

On Thursday, it emerged that two of Britain's overseas territories, the Cayman Islands and the British Virgin Islands, have not signed up to Cameron's company ownership register. "He'll have to force them, and he could force them," said Lawson.

"The opportunity of this summit is to crack down on the mechanisms that are used to fuel corruption around the world," Rosie Sharpe told DW. "And often those mechanisms are things that the developed countries provide - the lawyers, the accountants, the anonymous shell companies that are used to hide dirty money. In particular, there is pressure on the UK prime minister to ensure there is transparency in the UK's own backyard."

Caveats and pulled punches

Anti-corruption NGOs had mixed feelings about the UK's new proposals. Transparency International's senior global advocacy manager Maggie Murphy was positive about the initiative to make property ownership in the UK more transparent. "It's actually a very bold move," she told DW. "Crucially, it will look at who currently owns property in the UK today - it will not only apply to properties purchased in the future. That's really positive."

But the issue of forcing tax havens onto the new register was more thorny. "We think that although the UK has shown great leadership in bringing together these 40 countries, and getting some really strong commitments out of them, it's disappointing that those overseas territories have not committed to established published registers, and that will be disappointing to the prime minister, too," she said.

Oxfam's Max Lawson was less forgiving towards Cameron. "The UK is in a unique position to do something really dramatic to end the era of tax havens," he said. "It's not often you have a situation where a country is in a unique position to do so much."

He also suggested a few other steps that could be taken: "It's also about supporting the movement in Europe towards cracking down on activities by multinational corporations," he said. "Ensuring that they are publishing where they pay their taxes on a country-by-country basis. It's about looking at how developing countries are being affected by tax dodging. At the moment all the reform of tax havens and tax dodging is being handled by the OECD, which is obviously a club of rich countries. So the reforms are being done in a way that benefits them only."