Nigeria has called on an anti-corruption summit in the UK next week to support publicly accessible registers of beneficial ownership. It says the registers will help identify the individuals hiding behind corporate vehicles while laundering public funds in offshore territories.
The call was made by the Nigerian minister for justice, Abubakar Malami, at a separate anti-corruption conference organised by the One charity in Nigeria – often cited as one of the African countries most held back by endemic corruption.
Britain has been unable to persuade its overseas territories to commit to publicly accessible registers of ownership, and after three years of talks the British prime minister, David Cameron, has had to settle for forms of registers only open to police and law enforcement agencies on demand. Britain's own public register of beneficial ownership goes live next month.
Ahead of the summit, the Cayman Islands disclosed that they were still under pressure to sign up by the UK government to a EU-related measure on automatic exchange of beneficial ownership, as opposed to a system based on disclosure on request, the agreement originally signed with Whitehall last month.
Cayman Islands' financial services minister Wayne Panton told the Cayman Reporter: "This is now yet again a further standard which is being proposed and which seems to be gathering momentum, which we are being asked to give in to. Basically the ink has barely dried [on the last agreement] and we are talking about another initiative. A lot of the impetus for this thing has come about from the Panama Papers and the significant overreaction in respect of some of those things."
"Now it has evolved to an 'automatic exchange' approach," Panton explained, "which by definition will effectively mean if you commit to it you have some quasi-central register. What is just incredibly surprising is the speed with which the proposal was developed and seems to be supported."He said all of the British overseas territories and crown dependencies had been asked to consider committing to the new initiative, which was an extension of the agreement signed in April, which was an "on request" approach.
It is not clear if many of the leaders of the overseas territories will attend the London conference next week which is likely to be attended by as many as 40 countries, including African leaders fighting corruption and key figures in the G20 such as the US secretary of state, John Kerry.
The summit communique is likely to include a commitment to make public contracting open by default so that businesses and citizens could follow a clear record of how public money was spent.Malami also disclosed that Nigeria would sign an open government partnership, likely to be a centrepiece solution to government corruption promoted at the summit.
It will be the first time that governments have clearly laid out a vision of accessible usable data across the entire chain of public contracting. Total government spending through contracting is estimated at $9.5tn (£6.5tn) worldwide.
Some countries have committed themselves to public contracting on individual projects such as the giant Mexico City airport, and there will be calls for these to go wider.
In a frank admission of how far Nigeria needs to go to end corruption-induced poverty, Malami admitted "a patronage culture has evolved around a powerful elite that is in control of oil revenues and would do anything to maintain the status quo. With weak systems of accountability, this has created a situation where corruption has become embedded and accepted as part of life in Nigeria."
Grand corruption, he said, "has led to a huge level of illicit asset flight and the illegal transfer of a large proportion of natural resource revenue out of Nigeria to offshore bank accounts or for investment in opaque economies, while also creating a widespread culture of corruption and impunity at all levels of society."
He also called for the London summit to take steps to increase transparency in the management of returned stolen assets, to ensure ease of access in the recovery of stolen assets, and to ensure that "illicit enrichment" or non-explainable wealth could be used as the basis for recovery of stolen public assets.
https://www.oecd.org/tax/forum-on-tax-administration/ftajitsicnetwork.htm
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http://www.theguardian.com/news/2016/apr/12/panama-papers-global-tax-officials-inquiry-paris-meeting
Panama Papers: global tax officials to launch unprecedented inquiry
Investigators from 28 countries to meet in Paris in attempt to develop an international strategy for cracking down on secret offshore holdings
Tax investigators from 28 countries will meet in Paris on Wednesday to launch an unprecedented international inquiry following the publication of the Panama Papers.
Senior officials from tax authorities around the world have said they intend to work together to analyse information revealed by the documents, which have provoked international concern over the offshore industry.
Investigations have been launched in a number of countries over the past week, but the Paris meeting will be an attempt to develop a global strategy to crack down on offenders.
The sheer scale of the leak – 11.5m documents, covering 210,000 companies in 21 offshore jurisdictions – has led to Wednesday's hastily arranged meeting.
The aggressive new approach is being led by the Joint International Tax Shelter Information and Collaboration (Jitsic) network, of which the UK is a leading member.
A spokesman for Her Majesty's Revenue and Customs (HMRC) confirmed that it would be sending delegates to the Paris conference.
Jitsic's chairman, Chris Jordan, has previously spoken of establishing a "global mindset for tackling tax evasion and aggressive tax avoidance".
Jordan, who is Australia's tax commissioner, has established a reputation for his direct approach to multinational companies over their tax affairs.
He previously set up a six-country collaboration to investigate tech companies, including Apple, and has been praised for revolutionising Australia's approach to tax collection.
"You are 'structuring in' aggressively, we will go after you aggressively," he told the Sydney Morning Herald.
He now wants to develop a global approach to the exchange of information on tax collection.
"We're basically trying to get the bigger picture," Jordan told the Financial Review. "It's never been tried on this scale before.
Jordan has emphasised the importance of speed, telling officials that he expects immediate information exchange, rather than the traditionally slow approach."A number of countries have got slices or pieces of the data and that's been very useful, but really, the start of the conversation is to work out who's got what, how we can pool that information and start to work together."
The meeting in Paris will be chaired by the Australian tax office's head of international tax, Mark Konza.
The Panama Papers are the result of a huge leak of information from the Mossack Fonseca law firm in the central American country.
The International Consortium of Investigative Journalists (ICIJ), along with media partners including the Guardian, have spent several months analysing data that highlighted how world leaders and their close associates have used a range of complex financial structures to hide their wealth.
The Icelandic prime minister was forced to step down after it emerged that he had connections to an offshore company.
Among the national leaders revealed to have offshore wealth are Nawaz Sharif, Pakistan's prime minister, and Ayad Allawi, the former interim prime minister and former vice-president of Iraq.
David Cameron has come under pressure after it was disclosed that he had invested in an investment fund set up by his father in Panama.
Last Friday, the UN's independent expert on foreign debt and human rights, Juan Pablo Bohoslavsky, stressed the need to end tax secrecy.
"Tax evasion destroys trust in public institutions and the rule of law, and shrinks the fiscal space for investing in public healthcare, education, social security and other goods and services," he said.
"Public funds that are essential to guarantee economic, social and cultural rights to all are robbed from the people."
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Anti-tax evasion measures approved by EU finance ministers
Ministers agree to propose joint list of tax havens and approve plan to automatically exchange data on shell company owners
EU finance ministers have approved a series of measures to tackle tax-evading methods that were exposed by the Panama Papers.
Speaking on the second day of talks in Amsterdam, Jeroen Dijsselbloem, the finance minister of the Netherlands, which holds the EU's rotating presidency, said: "The sense of urgency is definitely much bigger.
"We've been [so] very busy competing with each other ... that big companies tend not to pay taxes."
The 28 EU member states are "very committed to close the gaps," added Dijsselbloem, the president of the Eurogroup of eurozone finance ministers.
Among the measures, the EU will propose a joint list of tax havens to expose jurisdictions used by European individuals and companies to evade or minimise tax.
Pierre Moscovici, the European economic affairs commissioner, said: "There is unanimous support that Europe create its own list of tax havens by this summer."
EU countries already have individual lists based on differing criteria, which could make drawing up a unified register difficult.
The ministers also supported a proposal to automatically exchange data in order to expose the real owners of shell companies.
Britain, France, Germany, Italy and Spain unveiled the measure at the G20 talks in Washington DC earlier this month.
The French finance minister, Michel Sapin, said "there is an assumed and converging willingness to fight any anonymous mechanisms" that aid tax evasion and money laundering.
EU member states will begin talks next week on new rules requiring big companies operating in Europe to make public what they earn in each country, Dijsselbloem said.
Country-by-country reporting has long been a key demand of tax activists, who accuse big corporations of secretly shifting profits to low-tax jurisdictions, often through the use of shell companies.
EU governments are divided on the proposal, with some arguing that sensitive corporate data should remain exclusive to tax authorities and not be made public.
Austria's finance minister, Hans Jörg Schelling, said: "I think we should not overshoot in tackling these things out of the hysteria on Panama."
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