First, the good news: the UK government has committed to creating a central public register of company ownership following Parliament’s approval of this crucial measure to tackle crime and tax dodging. This follows the 2013 commitment by British Prime Minister David Cameron during his Presidency of the G8 countries. The new register will be available from 2016 under provisions in the Small Business, Enterprise and Employment Bill, and will impose only minimal requirements on most businesses. According to our colleagues at Christian Aid:
“For the majority of the roughly three million UK companies, the new rules will be easy to comply with. Most have simple ownership structures in which the already declared shareholders are the individuals who control the company. However, Global Witness has estimated that there are up to 410,000 people who control UK companies indirectly, which gives the opportunity to hide tax evasion and corruption. The new register will tackle this by requiring all companies to declare the individuals who have control.”
Civil society has strengthened the original proposal for the Bill in several key respects, particularly regarding the requirement for updating registry information and removal of proposed blanket exemptions. Christian Aid again:
” . . . key improvements have been made. For example, the public register will be updated more often from 2017, restrictions on sharing information from the register have been removed and mass exemptions from the register will have to be debated in Parliament.”
Now the bad news. The Bill simply doesn’t tackle the lack of transparency of ownership of companies that are owned or partly owned by foreign companies or trusts, which applies to one heck of a lot of companies. And to make matters much, much worse, despite Prime Minister David Cameron’s earlier commitment to require Britain’s Overseas Territories and Crown Dependencies to follow the UK example and adopt a comparable measure for their territories, he has been comprehensively rebuffed.
So in conclusion, while recognising that the Bill is a valuable step forwards, and can contribute to shaping a new norm for adoption by other countries, the current measure requires further refinement to remove the loopholes. Furthermore, the position of the OTs and CDs is unacceptable and Cameron or his successor after the coming elections must take action to impose public registries on these territories.