Anti-corruption summit, UK commits to act on tax havens

The summit was called a year ago, but acquired new significance after the Panama papers revealed tax affairs of the global rich

business Updated: May 11, 2016 22:27 IST
Prasun Sonwalkar
Prasun Sonwalkar
Hindustan Times
David Cameron,Panama Papers,Chief Vigilance Commission
Activists protest in Brussels after Panama Paper revelations. The summit in London was called a year ago, but acquired significance after the papers revealed tax affairs of the global rich (AFP)

Prime Minister David Cameron on Wednesday said Britain had secured the agreement on two of three key issues related to its overseas territories that are reputed to be tax havens, a day before London hosts a global summit on tax evasion and corruption.

Cameron has been criticised for leading on the summit when Britain itself faced questions about allowing tax havens in its overseas territories. The summit was called a year ago, but acquired new significance after the Panama papers revealed tax affairs of the global rich.

Cameron told the House of Commons: “We have asked three things of the overseas territories and crown dependencies. We asked for automatic exchange of tax information; we asked for a common reporting standard for multinational companies and we asked for central beneficial ownership registry so UK enforcement could know who really owns the companies that are based there. They have delivered on the first two and they will be following and delivering on the third”.

An overseas territory is a territory belonging to Britain by settlement, conquest or annexation. There are 14 British overseas territories: British Indian Ocean Territory, Gibraltar, Bermuda, the Falkland Islands, South Georgia and the South Sandwich Islands, British Antarctic Territory, St Helena and its dependencies (Ascension and Tristan da Cunha), Montserrat, the British Virgin Islands, the Cayman Islands, Turks and Caicos Islands, Anguilla, the Pitcairn Group of Islands, and the Sovereign Base Areas on Cyprus.

Queen Elizabeth is represented in the territories by governors, or in some cases by commissioners, administrators or residents, who are responsible to the British government, which is responsible for the security of the overseas territories and for their foreign affairs and defence-related matters, but most have their own elected government.

Attendees at Thursday’s summit include India’s chief vigilance commissioner K V Chawdary and Afghanistan President Ashraf Ghani.

The opposition Labour party said a Conservative government “hosting an anti-corruption summit is like putting the fox in charge of the chicken coop”. Cameron was also accused of hypocrisy after recently admitting to benefiting from an offshore account.

Jayati Ghosh of the Jawaharlal Nehru University joined 300 economists from across the world to urge leaders at the summit to agree new rules to force companies to report taxable activities in every country.

Asking Cameron “to look closer to home”, The Guardian said in an editorial on Wednesday: “The prime minister is not personally corrupt – but he is certainly guilty of epic hypocrisy. So, for that matter, are Britain and the west”.

“They have spent decades ordering poor countries and failed states to sort out their problems with dodgy money, even while taking much of that dodgy money and ploughing it through their banks, their ritzy stores, their estate agents, and their offshore tax havens – with barely any questions asked or eyebrows raised”, it added.

First Published: May 11, 2016 22:26 IST