London : Anti-Corruption Summit May 2016


London : Anti-Corruption Summit May 2016

On 12 May the UK hosted the first international Anti-Corruption Summit attended by leaders from business and civil society with the aim of agreeing practical steps to expose corruption, drive out the culture of corruption where it exists, to punish perpetrators and support those affected by corruption.

The British Prime Minister, David Cameron, would wish to establish a register of foreign companies that already own property in the UK as well as those that will buy in the future. It has been reported by various sources that there are estimated to be in the region of 100,000 properties owned by foreign registered companies in England and Wales with the majority of those properties in the London area.

Mr Cameron is reported as stating that that the register would have the effect that ‘corrupt individuals and countries would no longer be able to move, launder and hide illicit funds through London’s property market…”. He also invited British Overseas Territories and Dependencies to establish a gold standard register of beneficial ownership and the exchange of that information.

Mr Cameron is also expected to announce the intention to establish in London a centre for the co-ordination of international efforts against corruption.

In the course of the Summit a total of 40 countries have agreed to share information on beneficial ownership between governments, through the information will not be publically available. The US has so far declined to share information, along with the British Virgin Islands.

As part of a wider policy Mr Cameron announced during the Commons debate on the Panama Papers in April, that the British Overseas Territories and Crown Dependencies have agreed to provide further disclosure on the beneficial ownership of companies registered in their jurisdictions. That information would be accessible by the UK’s law enforcement and tax agencies.

The disclosure of beneficial ownership would be in addition to the exchange of tax information exchange agreements that are already being put in place.

These steps are being taken in tandem with the proposal announced in 2015 to create a new criminal offence that would enable the UK authorities to prosecute UK corporations that fail to prevent the facilitation of tax evasion.

It appears that the legislation may introduce a strict liability offence if an organization fails to take reasonable measures to prevent its representatives facilitating tax evasion. The offence may comprise a three stage test. First tax evasion by an individual or entity, second an agent of the organization knowingly facilitating the evasion and that organization failing to take action to stop the agent’s activity.