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Matt Carthy MEP welcomes transparency move for British tax havens

3 May, 2018 - by Matt Carthy MEP

Sinn Féin MEP Matt Carthy has welcomed the British Tory government’s U-turn on tax transparency in its overseas territories, calling it a “major win” for the tax justice movement. The amendment to the sanctions and anti-money laundering bill was adopted in the British Parliament this week and will require the 14 British overseas territories to establish public registries of company ownership by 2020.

Carthy, a member of the European Parliament’s special committee on financial crimes, tax evasion and tax avoidance (TAX3), said: “The Tory government was forced into the position of being unable to oppose this amendment because of public pressure and effective campaigning on tax transparency, and they were unsuccessful in watering down the measure.

“This step is a major win for the international tax justice movement. The 14 British overseas territories include some of the worst tax havens in the world, such as the Cayman Islands, Bermuda and the British Virgin Islands. Almost half of the companies named in the Panama Papers were registered in the British Virgin Islands alone.

“These jurisdictions sell secrecy, which provides cover not only to corporations and individuals who want to avoid paying their fair share of tax, but also to organised crime and corrupt public officials who want to launder their dirty money.

“Many of us in the European Parliament celebrated a win last month when the fifth Anti Money Laundering Directive (AMLD) was endorsed by MEPs and meant that public registries of beneficial ownership for companies would finally be introduced at the EU level by 2020. The fact that similar rules will also apply to these notorious tax havens under British jurisdiction is an equally important step that will help reduce illicit financial flows and lift the veil on corruption and tax-dodging.

“There are similar loopholes in this bill as there are in the fifth AMLD – such as being able to avoid being named as a beneficial owner of a company by ensuring your ownership does not meet the 25 per cent threshold of company share – as well as the risk that the registries may not be independently verified and that obstacles will be put in place of full public access to the registries. The measure will also not apply to the British crown dependencies, such as the Isle of Man, recently highlighted in the Paradise Papers as a centre for tax fraud.

“These issues will need to be addressed in the future, but this move should be regarded as a major victory for the tax justice movement internationally."

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