The secret’s out in the Queen’s Speech
01 Jan 1970 1:00 am
Corporate secrecy has assisted fraudulent activity in the UK with criminals, abetted by corrupt intermediaries, exploiting the anonymity afforded to bearer shareholders and beneficial owners. On the 4th June, during the Queen’s speech, the government announced new and revolutionary legislation designed to intercept and combat this misconduct. Robert Barrington, Executive Director of the UK’s leading anti-corruption organisation Transparency International UK, supporting the new policies remarked:
“There is abundant evidence that corrupt funds are laundered through the UK and are used to buy property, luxury goods, sports clubs, companies, fine arts and other assets.” Furthermore he suggests that this was putting “Britain’s reputation at risk and effectively granting impunity to people who are serious criminals in their home countries.”
Implementation of this reform will force companies to register all shareholders of more than 25%: both those with voting rights and others who have some control of the company. The reform further moves to abolish bearer shareholders with all existing holders made to exchange their warrants for registered shares.
With the register demanding an update every 12 months, law enforcement will stand a better chance of reprimanding businesses that have usurped the UK’s systems. Moreover, companies will be provided with the information to find out exactly who it is they are doing business with, moving to prevent engaging in commerce with dangerously ambiguous clients.
These ground-breaking reforms have been welcomed by campaign group Global Witness because they will force companies to declare who really owns and controls them. Global Witness has shown how the use of anonymous companies facilitates a host of crimes including corruption, tax-evasion and money-laundering. Most recently, Global Witness worked with Ukrainian organisations to demonstrate how Viktor Yanukovych’s presidential palace compound was part owned by an anonymous British company (read more on this story).
“Anonymous companies lie at the heart of some of the worst problems of our time. Corrupt politicians, tax evaders, terrorists, drug gangs, and warlords all use them to cover their tracks. If we can change this, we will crack open solutions to many other problems. The UK should be applauded for leading from the front on this issue, and we hope to see the US, the EU and Britain’s Crown Dependencies to follow suit,” said Global Witness co-founder Charmian Gooch.
It is crucial that information on the real, beneficial owners of companies is out in the open. It will offer the transparency needed to hold companies to account, companies to know who they are doing business with, and law enforcement from around the world to chase down criminals who have abused UK companies.
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