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David Cameron to Seek More Transparency From Offshore Firms Buying in Britain Leaders Vow to End Offshore Tax Evasion and Financial Corruption
(about 7 hours later)
LONDON — Two days after being overheard describing two nations as “fantastically corrupt,” Prime Minister David Cameron of Britain announced plans on Thursday to clamp down on money laundering in his own backyard. LONDON — Six weeks after the Panama Papers revealed vast stores of hidden offshore wealth around the world, leaders from Britain, the United States and other nations on Thursday vowed to cooperate on sweeping measures against financial corruption.
Mr. Cameron, who led a one-day summit meeting on corruption on Thursday, outlined proposals to make offshore companies that buy property in Britain reveal their true ownership, forcing those that hide behind complex financial structures to accept transparency. At a conference in London, Britain’s prime minister, David Cameron, who two days earlier was overheard describing Afghanistan and Nigeria as “fantastically corrupt,” announced measures to clamp down on money laundering in his own country.
The same provisions would apply to firms that already own property in the country and to those bidding for British government contracts, Mr. Cameron’s office said before the summit meeting. He put forth proposals to make offshore companies that buy property in Britain reveal their true ownership, forcing those that hide behind complex financial structures to accept transparency. The same provisions would apply to firms that already own property in the country and to those bidding for British government contracts.
In practical terms, that would mean that companies buying or owning British property, or tendering for state contracts, would first have to supply information on “beneficial” — that is, real — ownership to a new public register. Foreign companies own around 100,000 properties in England and Wales, more than 44,000 of which are in London, according to the British government. In practical terms, that would mean that companies buying or owning British property, or vying for state contracts, would first have to supply information on their actual ownership to a new public register.
Mr. Cameron hopes that his announcement, along with indications that other nations may follow suit as well as efforts to automatically exchange information on true ownership, will overcome resistance to change. However, transparency campaigners have called for even more action directed against tax havens. Foreign companies own about 100,000 properties in England and Wales, more than 44,000 of them in London, according to the British government.
After Mr. Cameron spoke, Secretary of State John Kerry of the United States reiterated the prime minister’s call for transnational action against corruption. Secretary of State John Kerry, representing the United States, condemned financial corruption as a threat to democracy.
“We have to say no safe harbor anywhere” for criminals and corrupt leaders, Mr. Kerry said. “I’ve been shocked by the degree to which I find corruption pandemic in the world today,” he said at the conference, which was at Lancaster House, a mansion used by Britain’s Foreign Office.
He also noted a growing sentiment that the rules of capitalism were rigged against ordinary people, which he said was being reflected in the vitriol of the American election season. “People are angry and the anger is going to grow unless we shut the doors and we prove that there is a fairness that can be established,” he said. The hiding of assets from tax authorities harms people around the world by depriving governments of the resources they need to provide health care, build schools, and invest in infrastructure, he said.
The gathering is being attended by around a dozen prime ministers or presidents, including President Muhammadu Buhari of Nigeria and President Ashraf Ghani of Afghanistan. Mr. Kerry also said that corruption was a threat to governments, by encouraging foreign extremism and fomenting domestic discontent.
“Criminal activity literally is a destroyer of nation-states, because it contributes to drug trafficking, arms smuggling; it contributes to human trafficking; it becomes the facilitator of activities that create substates — in some cases, deep states — within states,” he said, referring to criminal networks that, in some countries, are more powerful than the government itself. “It is a contributor to terrorism, my friends, in many different ways.”
Mr. Kerry added: “The extremism that we see in the world today comes in no small degree from the utter exasperation that people have with the sense that the system is rigged. And we see this anger manifesting itself in different forms in elections around the world, including ours. People are angry and the anger is going to grow unless we shut the doors and try to prove to people there’s a fairness that can be established in the system.”
Governments everywhere must demonstrate to their citizens that the rules of capitalism are not rigged against ordinary people, Mr. Kerry said.
Mr. Cameron said he hoped that collaboration among nations would overcome resistance to greater transparency. Some advocates, however, have asserted that nations like Britain and the United States need to go even farther in cracking down on tax havens within their own borders.
The gathering was attended by a number of leaders, including President Muhammadu Buhari of Nigeria and President Ashraf Ghani of Afghanistan.
On Tuesday, Mr. Cameron was overheard telling Queen Elizabeth II that Afghanistan and Nigeria were “fantastically corrupt countries,” and “possibly the two most corrupt countries in the world.”On Tuesday, Mr. Cameron was overheard telling Queen Elizabeth II that Afghanistan and Nigeria were “fantastically corrupt countries,” and “possibly the two most corrupt countries in the world.”
He made the comments at a Buckingham Palace party, prompting Mr. Buhari to say through a spokesman that he had been “deeply shocked and embarrassed” by Mr. Cameron’s remarks, which he did not, however, seek to rebut. He made the comments at a Buckingham Palace party, prompting Mr. Buhari to say through a spokesman that he had been “deeply shocked and embarrassed” by Mr. Cameron’s remarks — which Mr. Buhari did not, however, seek to rebut.
In comments released by his office on Thursday, Mr. Cameron said that “the evil of corruption reaches into every corner of the world,” adding that it lies “at the heart of the most urgent problems we face — from economic uncertainty, to endemic poverty, to the ever-present threat of radicalization and extremism.” Mr. Cameron said on Thursday that “the evil of corruption reaches into every corner of the world,” adding that it lies “at the heart of the most urgent problems we face — from economic uncertainty, to endemic poverty, to the ever-present threat of radicalization and extremism.”
He added: “A global problem needs a truly global solution. It needs an unprecedented, courageous commitment from world leaders to stand united, to speak into the silence and to demand change.”He added: “A global problem needs a truly global solution. It needs an unprecedented, courageous commitment from world leaders to stand united, to speak into the silence and to demand change.”
British officials expect Afghanistan, France, the Netherlands and Nigeria to commit to starting their own public registers of true company ownership, and other nations, including Australia and New Zealand, to take the initial steps toward doing so. Afghanistan, Nigeria, France and the Netherlands pledged on Thursday to set up their own public registers of true company ownership. Other nations, including Australia, New Zealand, Georgia and Ireland, agreed to take initial steps toward that goal.
Plans are also expected to be announced for an International Anticorruption Coordination Center, hosted in London, in partnership with Australia, Canada, New Zealand, Switzerland and the United States, as well as Interpol. Plans are also underway for an International Anticorruption Coordination Center in London, in partnership with Australia, Canada, New Zealand, Switzerland and the United States, as well as with Interpol.
Britain’s relationship with its overseas territories has been criticized by campaigners against tax evasion, after the recent leak of documents known the Panama Papers, in which the British Virgin Islands emerged as a major center of offshore activity. Representatives of Panama and the British Virgin Islands were not invited to Thursday’s meeting, though the Organization for Economic Cooperation and Development announced on Wednesday that Panama had agreed to join around 100 other countries in sharing information automatically to try to tackle the problem of tax evasion. In a communiqué, participants at the meeting on Thursday outlined pledges to root out bribery and tackle the problem of corruption in many fields, including sports. In a statement, Britain said it planned to start an Anticorruption Innovation Hub that would bring together technology experts and law enforcement authorities to find new ways to root out corruption.
Mr. Cameron has also been embarrassed personally after he eventually admitted that he had earned money through an offshore trust established by his father, who was named as a client of Mossack Fonseca, the law firm at the center of the Panama Papers. Governments also vowed on Thursday to cooperate on the recovery of stolen assets. A meeting on that subject will be in the United States next year, focusing on returning assets that were improperly taken from Nigeria, Ukraine, Sri Lanka and Tunisia.
In a statement, Nick Bryer, Oxfam’s head of inequality campaign, cast doubt on the scope of the plans that were outlined. “Registers of company ownership that are not public are simply not good enough,” he said. “The prime minister should push for full transparency of the U.K.’s overseas territories and crown dependencies at the anticorruption summit.” The issue was highlighted by Mr. Kerry, who referred to “tens of billions of dollars” stolen from Nigeria in the past.
Mr. Kerry said that he was working “to restore $350 million” to Nigeria, adding that “every one of those million dollars that comes back to a country is the opportunity to provide a desk and a chair and school and shelter and health care and meet the needs of nations.”
Britain’s relationship with its overseas territories has been criticized by people fighting tax evasion, after the recent leak of the documents known the Panama Papers, which revealed how wealthy people used offshore banks and shell companies to conceal their wealth. The papers were confidential documents from a law firm in Panama. They exposed the British Virgin Islands as a major center of offshore activity.
Representatives of Panama and the British Virgin Islands were not invited to Thursday’s meeting, though the Organization for Economic Cooperation and Development announced on Wednesday that Panama had agreed to join around 100 other countries in sharing information automatically to try to tackle the problem of tax evasion.
Mr. Cameron has also been embarrassed personally after he admitted eventually that he had earned money through an offshore trust established by his father, who was named as a client of Mossack Fonseca, the law firm at the center of the Panama Papers.
In a statement, Nick Bryer, of Oxfam, the international confederation of 18 organizations working together with partners and local communities in more than 90 countries to fight poverty and inequality, cast doubt on the scope of the plans that were outlined.
“Registers of company ownership that are not public are simply not good enough,” he said. “The prime minister should push for full transparency of the U.K.’s overseas territories and crown dependencies at the anticorruption summit.”