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Companies: Overseas Territories Registration

Volume 771: debated on Wednesday 20 April 2016


Asked by

To ask Her Majesty’s Government what further discussions they have had with Overseas Territories since last year’s Overseas Territories Joint Ministerial Council about moves towards greater transparency of beneficial ownership for companies registered within their jurisdiction, in the light of the United Kingdom’s chairmanship of the International Anticorruption Summit in May 2016.

My Lords, the Government have had extensive technical discussions with overseas territory leaders and officials to help them develop a timely, safe and secure process of exchange of company beneficial ownership information for law enforcement purposes. My right honourable friend the Prime Minister informed the other place on 11 April that we had reached agreement to provide UK law enforcement agencies and tax authorities with full access to company beneficial ownership information held in the territories.

No doubt the Minister will recall that in 2013 the Prime Minister called for public registers of beneficial ownership from our overseas territories. Can she explain to us what British sovereignty means in relation to the overseas territories, which benefit from being under British law and protection, when they have refused to accept the Prime Minister’s proposal and we are told that some actually refused to meet Treasury Ministers last December when they were over here for the overseas territories conference? Does the Minister recognise that this is a question not just of tax but of money laundering? Substantial properties in the UK, including in London, are owned through shell companies by dubious men and dubious countries that have earned their money by dubious means.

My Lords, this Government are leading the way in ensuring that there is transparency in tax matters internationally. We often find ourselves leading but not necessarily having the support of all those around the world. The overseas territories are indeed separate jurisdictions with their own democratically elected Governments, under which they are responsible for financial matters. We have worked in partnership with them on this matter and have made great progress on having central registers of beneficial ownership. When my right honourable friend the Chancellor of the Exchequer met the G5 in the United States last week, he made it clear that further reforms can be made in the future. So this is a work in progress for everybody, but let us recognise the great strides already made by the overseas territories.

I am grateful. The Prime Minister deserves substantial credit for the actions taken so far, but why are only UK law enforcement authorities involved in this? What is the problem with our partners? Some weeks ago I went on the first kleptocracy tour in London to view the properties bought with laundered stolen money through our overseas territories. Our partners in the EU have as much of an interest in finding out who the beneficial owners are as we have, so why is access to this information restricted to UK law enforcement authorities? Gibraltar and Montserrat are opening up their registers to the rest of the EU, so why can we not go a bit further than that? Even if we cannot allow journalists and other interested bodies access to this information, surely the law enforcement authorities of other, friendly partner countries should have access to those registers.

My Lords, clearly, there is progress to be made on that very point. My right honourable friend the Chancellor of the Exchequer wrote to the G20 members last week with regard to the G5 initiative on the automatic exchange of beneficial ownership information, exactly in line with what the noble Lord proposes. The initiative is still very new, but we are going to start discussion with the overseas territories and Crown dependencies shortly and I hope that our EU partners will take note.

Since it is an international conference and we are in the chair, will the UK Government be pressing the US to explain and to rectify the situation where the states of Delaware, Nevada and Wyoming allow no transparency of information on any subject, to the detriment of our overseas territories? Undoubtedly, if that continues, we will see a loss of business from our overseas territories to those three US states.

My Lords, we will be pressing all those who attend the conference to pursue greater transparency. We have made it clear that the global gold standard ought to be public, central registers of beneficial ownership. We will say that to our great friends and to those who are not perhaps such close friends but will be there and will, I hope, be our close friends by the end.

I declare an interest as a non-exec of the Open Data Institute. Is the Minister aware of the work of the Open Data Institute and many of the interesting not-for-profit start-ups working in the open data space specifically on this issue? I point to one, as an example: OpenCorporates. I urge the Minister to keep using open data as one of the major levers in this transparency piece.

My Lords, while I acknowledge the good work done by the Government recently on this, does the Minister agree that public transparency is important not only in the fight against corruption but as a very significant moral issue? Does she agree that it is the duty of all Governments, including those of overseas territories, to work towards public transparency?

The right reverend Prelate is right: it is a moral matter. A very wide debate should be held on whether or not there is transparency only in cases where there is a revelation that might assist with prosecutions, either in the civil courts or criminal courts, on matters such as evasion or aggressive tax avoidance. That is a wider issue, but the right reverend Prelate is right to say that it is one that we ought to be pursuing.

We certainly congratulate the Government on the progress made thus far, but does the Minister accept that unless company ownership is made public and accessible there is no way in which our Government will be able to monitor compliance? It is quite clear that our overseas territories are the primary base for a very great deal of corruption and money laundering, and it is quite clear that we need to act.

My Lords, I have to take the noble Lord a little to task here. It is the case that where there is a central register of beneficial ownership, the National Crime Agency and the tax authorities—which are of course operations of this Government—are able to gain access to the very information that the noble Lord specified. I gently remind him that in taking a lead on these matters since 2010, in the coalition Government and now, we have done more than the Labour Government even attempted to do in 13 years.