7 December 2012

Africa: UK Government Must Do More to Tackle Financial Secrecy

press release

As the world observes International Anti-Corruption Day on Sunday (December 9), Christian Aid reiterates its call for the UK government to do more to end financial secrecy.

The Prime Minister has said he wants to put transparency at the heart of his international agenda, including a focus on tax transparency at the G8.

'These positive statements must be matched by strong action next year,' says Christian Aid's Senior Governance Adviser Eric Gutierrez.

'Reforms are crucial in order to bring an end to corporate anonymity and tax haven secrecy and to change the current reality, in which the UK is one of the world's most important suppliers of financial secrecy. Secrecy encourages corruption and tax dodging and so denies resources to those living in hunger and poverty.'

In April 2009, the G20 declared in London that 'the era of bank secrecy is over.' Two years later, the Financial Services Authority published a damning report which stated that up to three-quarters of British banks appeared to be failing to check for cases of money laundering, even when dealing with high-risk clients.

Furthermore, according to the report, some banks are simply unwilling to turn down very profitable business with suspicious clients.

'With the wealth of evidence and official recognition that financial secrecy is deeply harmful, the government can do more to tackle this issue,' says Mr Gutierrez, who recently returned from the 15th International Anti-Corruption Conference held in Brazil.

The conference called for more pressure to be placed on countries such as Singapore, Switzerland and the UK - ironically perceived as 'corruption clean' - to set an example and stop providing secret 'parking spaces' for dirty money. These do untold damage, especially to the poor countries from where the money came.

Many of the solutions are already known - better enforcement of rules on beneficial ownership; automatic information exchange across borders; country-by-country reporting for multinationals; better regulation of trust and company service providers and more effective evaluation by financial and corporate watchdogs such as the Financial Action Task Force (FATF) and The Organisation for Economic Co-operation and Development (OECD).

Automatic information exchange involves countries sharing information on who owns what within their borders, making it harder to hide money 'offshore.'

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