Big European Nations Agree on Sharing Beneficial-Ownership Databy , , and
U.K., France, Italy, Spain, Germany Press for G-20 Accord
OECD's Gurria sees initiative `catching fire' and spreading
Five European countries agreed to automatically share information on the ultimate owners of companies and trusts and to press Group of 20 nations to adopt the same standards.
The U.K., Germany, France, Italy and Spain will allow data on company beneficial-ownership registers and new registers of trusts to be exchanged between the countries’ tax and law-enforcement agencies, ministers from the five countries said Thursday at a joint press conference in Washington. The five counterparts in the G-20 are pushing for the agreement to be implemented globally.
Public outrage generated this month by the exposure of billions of dollars in assets hidden in Panama, including accounts held by politicians and celebrities, spurred the finance ministers to reach agreement and ended resistance to retaining privacy for certain types of investment vehicles.
“The current events show that identifying the ultimate beneficial owner behind corporate structures is key to fight tax evasion, money laundering and illicit finance effectively,” German Finance Minister Wolfgang Schaeuble said. “In the future, nobody should be able to hide his activities behind complex legal structures and with tax evasion, this requires a global response.”
The U.K. government is at the center of the debate about tax avoidance, with a network of overseas territories such as Cayman Islands and the British Virgin Islands that offer shelter to the assets of the wealthy. Prime Minister David Cameron, who previously held shares in a fund domiciled in Panama, said this week he aims to force those jurisdictions to disclose the real owners of companies registered there.
“Today we deal another hammer blow against those who would illegally evade taxes and hide their wealth in the dark corners of the financial system,” U.K. Chancellor of the Exchequer George Osborne said. “Britain will work with our major European partners to find out who really owns the secretive shell companies and the trusts that have been used as conduits for evading tax and laundering money and benefiting from corruption.”
France, which until today had felt commitments fell short of what was necessary, said the agreement met its standards.
“France is totally, completely satisfied with the initiative of today, for the text of the letter we’re addressing to the G-20,” Finance Minister Michel Sapin said. “If we do everything that is set out in this letter, opacity will be finished.”
Getting other jurisdictions to join the pact will now be key to the success of the initiative. Angel Gurria, head of the Organization for Economic Cooperation and Development, said it was it was normal for a small group of countries to take the initiative, allowing others to join later.
“A determined, small group of people makes a proposal that makes sense and then you test it and it continues to make progress and it catches fire and then it becomes a worldwide initiative,” Gurria said.