How stands the Crown on hypocrisy?
by Kevin Harrington-Shelton
“We must practice what we preach”
Panama is being unfairly treated in an international pin-the-tail-on-the-donkey search for a culprit for the metastatic tax evasion underlying the chaos in the funding of public services in the United Kingdom. The Anti-Corruption Summit opening in London highlights the obvious: it doesn’t intend to get at the root of the problem. The European establishment actually promoted the principal politician behind the Luxembourg issue (Jean Paul Joncker) to the presidency of the Commission — and persecuted the whistleblowers. Neither Panama nor the British Virgin Islands — stars of the current Mossack Fonseca hit — are invited to share the red carpet in this new Oscars opportunity. “Out of sight, out of mind!”
There is (another) policy issue involved. Instead of making merchant bankers reap the whirlwind they had sown in the run-up to the 2008 financial crash, rather than insisting on a level-playing field for offshore services, on April 8 Prime Minister David Cameron quietly ramrodded through a major about-face on solving his own benefits funding problem. The City prevailed on backtracking from the UK’s 2013 G-8 landmark stance of requiring beneficial owner registries available to everyone — in the hopes that such a broad base of transparency minders will keep (even) the bankers honest. Registers on the mainland will indeed be available for public inspection from June 2016, but now the Crown’s offshore territories will — inexplicably — continue to sell secrecy, as their registers will remain closed to the public.
A killer phrase which ought be sculpted in stone at he Lough Erne shore where the Prime Minister pontificated it: “We must practice what we preach.”
Shadow foreign secretary Hilary Benn questioned it in the Commons: “If openness is good enough tor the UK, why should we accept a different position in our overseas territories?”
In light of the worldwide shock following Süddeutsche Zeitung disclosures, one is nonplussed by this about-face. And in the words the BVI government used to welcome it: “The BVI has worked for 30 years to carefully and legitimately build an industry that is well regarded and trusted by clients, global regulators and other international authorities. This agreement will play its part in ensuring that this continues to be the case.” This although its Financial Services Commission failed to consider one Mossack & Fonseca (BVI) & Co. license, after fining it $37,000 for deficient due diligence on money laundering. An Order in Council imposed direct rule on the tinier Turks & Caicos Islands in 2009, for far less than that. As befits the sunniest street in the City, the far-larger Cayman Islands (40 percent of whose residents are expatriates) describes a more thorough focus of the underlying issues, and its home rule appears to be firmly rooted in the Conservative Party donor list.
But still no one — anywhere in the Crown colonies — has posited any (moral) justification for purchasing a back-dated shelf company.
Yet not everyone in the UK is as passive as the government about reinforcing its revenues thus foregone to at least recoup $5,200 million gap arising from the Lords Spiritual recent objections to savaging benefits to the least-advantaged. Similarly concerned about the harm to which much of the Commonwealth — as well as the rest of the developing world — by granting regard of legal entity to companies formed on the mainland as well as offshore, on April 30 the charity “Christian Aid” carried out a unique protest in Mr. Cameron’s own constituency. (Curiously overlooked by media…) Using an internet database made available previously by Private Eye, Christian Aid politely pointed out two commercial properties held by Jersey and BVI corporations. Neither of which would be subject to the public scrutiny as the famous Oxfordshire pub aptly styled “The Fleece.” It may not be known in Panama that freeholders can weasel their way around (most) capital gains and inheritance taxes, by claiming not to be domiciled in the UK for tax purposes. Including nameless offshore corporations with friends in high places. The good burgers of Witney might be one day unpleasantly surprised to discover that the ultimate owner of the mall at 24-26 Witney High St. in BVI might turn out to be an instrumentality of one Chapo Guzman (and/or his heirs and assigns).
Is this why neither Panama nor Crown dependencies had been invited to the London summit? “Little children are to be seen and not heard!”
How stands the Crown on hypocrisy? Respondeat superior….
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