NGO calls for legislation to end UK’s role in corruption

NGO Transparency International UK has claimed that hundreds of billions of pounds are laundered through the UK each year and has issued a set of recommendations designed to end Britain’s involvement in such transactions. The move comes in response to the release of the Panama Papers, which have revealed Britain’s links to offshore territories. Transparency International called for the creation of central, public registers of beneficial ownership in Britain’s crown dependencies and overseas territories and for beneficial ownership standards in these areas to be equivalent to those in the UK as a whole. The NGO also called for legislation requiring foreign companies purchasing UK property or bidding for public contracts to disclose their beneficial owners and for professionals involved in money laundering, including lawyers and accountants, to face prosecution.

The UK must no longer be a safe haven for the corrupt, an anti-graft organisation has said, as the Panama Papers underline Britain’s unparalleled links to secretive offshore territories.

Corruptly sourced cash estimated to amount to hundreds of billions of pounds is laundered through the UK each year, owing in part to its historical connections with secretive overseas authorities, where money can easily be hidden, Transparency International UK said.

High property prices, which allow the corrupt to launder large sums within a single purchase, and a vast network of professionals who facilitate a range of transactions, make the UK financial system attractive to super-rich crooks, the organisation said.

Rachel Davies, the head of UK advocacy and research at Transparency International UK, said: “The Panama Papers have confirmed that the UK is a prime location for corrupt individuals looking to hide their illicit wealth and buy their way into respectability.”

Davies said the UK would have the chance to “get its own house in order” at an anti-corruption summit organised by the prime minister on 12 May.

“If corrupt individuals are allowed to continue to buy up luxury property and enjoy life in the UK, then the government risks its credibility in leading efforts to tackle corruption on the global stage,” she said.

Transparency International, a non-governmental organisation that works to root out corruption, has launched a set of recommendations to end Britain’s role in enabling global corruption amid an unprecedented leak of 11.5m files from the database of Mossack Fonseca, the world’s fourth biggest offshore law firm, based in Panama City.

The Panama Papers relate to more than 200,000 companies for which Mossack Fonseca acted as registered agent. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.

Corruption cases frequently involve anonymous companies registered in UK overseas territories or crown dependencies, such as the British Virgin Islands or the Cayman Islands, Transparency International UK said.

The organisation called for beneficial ownership standards in those crown dependencies and overseas territories should be brought in line with those in the UK, including central, public registers of beneficial ownership. A beneficial owner is the real owner of a company, even though their name may not appear on the shareholder register.

In June, the government will introduce a new central register that identifies the beneficial or “significant” owners of UK companies. The government wants to extend this principle to offshore firms registered abroad, including in UK overseas territories such as the British Virgin Islands and other tax havens.



Overseas territories have been resistant to the move and David Cameron has said he wants them to implement the registration themselves, rather than being forced to do it.

But a government consultation paper published in March leaves open the possibility that a central register might be kept in the country in which a firm is incorporated, in effect allowing offshore secrecy to carry on.

“These jurisdictions are used because they specialise in providing secrecy,” Transparency International UK said in its report.

“Currently, only a few of these countries require the names of companies’ beneficial owners to be collected on a central register. A fraction of these registers are open to the public or provide instant access for law enforcement agencies. This means there is very little information about the true owners of companies registered in most of the overseas territories and crown dependencies.”

The organisation called for lawyers, accountants and other professionals in the UK who are personally involved in laundering the dirty cash of corrupt individuals – knowingly or unwittingly – to face prosecution.

“The government should establish more effective administrative sanctions on professional enablers by encouraging professional bodies to withdraw professional licences from those implicated in such cases, in addition to prosecuting those who are personally involved,” the report said.

The government should introduce legislation that would require foreign companies wishing to purchase UK property or bid for public contracts to disclose their beneficial owners, the organisation recommended.



According to analysis by the Guardian, more than 90,000 properties in England and Wales are listed as having overseas owners with the Land Registry – at least 75,000 of which are owned by companies or individuals registered in tax havens.

In the UK, more than 75% of corruption cases involving property investigated by the Metropolitan police’s proceeds of corruption unit involved anonymous companies registered in “secrecy jurisdictions”. Of these, 78% of the companies involved were registered in either the UK’s overseas territories or crown dependencies.

“When this corrupt money enters the UK, it has the potential to inflate house prices, increase inequality and affect communities, public institutions and all those who have contact with illicit funds,” the report added.

