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UK leads world with new law to reveal who really owns companies

24 March 2015 - The UK is to create the world’s first public register of the hundreds of thousands of individuals who own companies, after Parliament today gave its final approval to the pioneering move against financial criminals.

Christian Aid strongly welcomed the breakthrough and praised the Government for persevering with the register - although it also cautioned against loopholes which could be exploited.

“This is an  important day for everyone who campaigns against the secrecy which helps tax evaders, money launderers and bribe payers and takers across the world to hide their tracks,” said Joseph Stead, Christian Aid’s Senior Economic Justice Adviser.

“The government can be proud of leading the world by ushering in greater transparency around who really owns and controls UK companies. Without the new register, it is hard for even the police to know who is behind a company used to commit serious crime.

“Now that is going to change – and other countries encouraged to follow suit. Indeed, several EU countries have already committed to setting up their own public registers.”

The new UK register is planned to be available from 2016 as a result of the Small Business, Enterprise and Employment Bill which received final Parliamentary approval today.

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.  

Christian Aid has worked with MPs and Lords as the legislation has passed through Parliament to ensure the register is as effective as possible and 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.

However, Mr Stead cautioned that the new UK register still leaves gaps which are open to exploitation by tax evaders and other financial criminals. These include inadequate requirements for information about the real owners of companies which are owned via foreign companies.

“Without full information about how these owners control companies, authorities in developing countries will be unable to gather sufficient evidence to prosecute tax dodgers and money launders, who cost the developing world billions every year,” added Mr Stead.

“There is still a chance to rectify this because there are further regulations to be finalised. We look forward to the next Government addressing this – and ensuring that all information on the register is as accurate as possible.”

He added: “The UK also has a more fundamental problem, which is that while it is doing mainly the right thing, the tax havens for which it is responsible are still providing the secrecy that attracts those who want to hide dirty money. I am thinking of islands such as the Cayman Islands, British Virgin Islands and Bermuda.

“They have completely rejected David Cameron’s repeated requests for them to clean up their acts on hidden company ownership. Given the harm that their secretive finance industries are doing to people across the world, including in the UK, this is intolerable and we expect strong action from the next Government.”

Ends

For more information please contact Rachel Baird on 0207 523 2446 or rbaird@christian-aid.org  24 hour press duty phone – 07850 242950 


Notes to editors:

1. Christian Aid works in some of the world's poorest communities in around 50 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.

2. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, sustainably. Our strategy document Partnership for Change explains how we set about this task.

3. Christian Aid is a member of the ACT Alliance, a global coalition of more than 130 churches and church-related organisations that work together in humanitarian assistance, advocacy and development. Further details at http://actalliance.org

4. Follow Christian Aid's newswire on Twitter: http://twitter.com/caid_newswire

5. For more information about the work of Christian Aid visit http://www.christianaid.org.uk

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