London Anti-Corruption Summit 2016

Unless more pressure is applied to embrace full transparency in adopting a public central register of companies, including tax havens, the corruption and tax dodging exposed by the Panama Leaks, representing only 2% of the offshore companies registered in Panama, will continue undisturbed.

Posted on 06/6/16
By Ikram Sehgal | Via ViewsWeek
(Photo via Cabinet Office, Creative Commons License, Creative Commons License)
(Photo via Cabinet Office, Creative Commons License, Creative Commons License)

Describing the May 12 Summit of 40 Heads of State and government along with important business leaders as “the biggest demonstration of the political will to address corruption”, British Prime Minister David Cameron said “I’ve really sensed today there is far more political will – not just from words but from actions – that will make a difference. If you don’t know who owns what, you can’t stop people stealing from poor countries and hiding that stolen wealth in rich ones. Those who indulge in corruption must not find a place to hide”. Rhetoric alone is not be enough to stop tax cheats, unfortunately nowhere is hiding illegal wealth more easy than in the UK and its dependencies.


The “London Communique” called for full implementation of the Financial Action Task Force (FATF) recommendations on “Transparency” and “beneficial ownership” that the proceeds of corruption should be identified, seized, confiscated and returned. The creation of the “Global Forum for Asset Recovery” will enable governments and law enforcement agencies to work together to achieve this,  strengthening co-operation between countries that have had assets stolen and the countries where those assets are hidden and help law enforcement on both sides to move ahead speedily to return illicit funds.


Over forty countries have now committed to viz (1) sharing information to catch the corrupt who operate across borders and (2) implementing the global common reporting method on tax transparency. The tax havens at the root of the current problems must introduce strict standards on transparency, otherwise global tax dodgers will always find a safe haven to stash their money. OECD Secretary General Angel Gurría called the London Summit a “dramatic revolution” where extra tax revenues will translate into hundreds of schools, hospitals, water and electricity, etc that the poor are now deprived of because of the hypocrisy practiced by the west of having the laws but not implementing them.


Sharing information about beneficial ownership along with their tax registration numbers in their country of origin between countries will make it easier for law enforcement agencies (LEAs) across the world to access this data for exposing and punishing the corrupt.  This still cannot be done publicly in the British Virgin Islands (BVI) and UK’s Crown Dependencies and Overseas Territories (CDOTs).   Unless more pressure is applied to embrace full transparency in adopting a public central register of companies, including tax havens, the corruption and tax dodging exposed by the Panama Leaks, representing only 2% of the offshore companies registered in Panama, will continue undisturbed.


Urging that anti-corruption measures be made a first-order priority in US foreign policy, US Secretary of State John Kerry said the US must set an example by signing on to full disclosure of “beneficial ownership”.  He said corruption is a bigger threat to the world than terrorists and extremists, they are an enemy because they destroy nation states. Recognizing the nexus between corruption, organised crime and terrorism. Kerry encouraged global efforts increasing transparency and empowering citizen’s oversight.  Corruption fuels many of today’s greatest threats i.e. terrorism, crime, money-laundering, etc, and compromises the integrity of govt officials, thus severely curtailing the ability of govts to address them. Our FIA is an efficient organisation having many good people, can they really be free agents dealing with whichever govt is in power?


A recent “Economist” survey shows that “crony capitalism” is greatly responsible for corruption is everywhere on the decline, except in Pakistan where it has increased exponentially. The Pakistani corrupt excel in taking money in suitcases to London, and in dhows to Dubai, how did they evade customs and immigration authorities on arrival unless there is deliberate connivance?  Does Cameron mean what he says that the corrupt (like Rahman Malik who boasts of legitimate business in the UK) will be denied the use of legitimate business channels which further their illicit activities and everyone who feeds on the proceeds of corruption will be dealt with according to law? The British must match their rhetoric with deeds, foreign policy imperatives cannot absolve those involved in murder, corruption and/or money-laundering.


“The Guardian” quoted a leading estate agent as saying that “making it obligatory for any foreign company buying UK property to join a public register of beneficial ownership would drive wealth creators away”. Many super-rich privacy-hungry oligarchs, media owners and tech billionaires from around the world invest in properties in London, they will likely sell off some of their assets if the proposals about tax registration numbers of beneficial owners  and property bought in cash being confiscated is implemented. This will be a long, hot summer for many panicky Pakistanis selling off real estate London in haste.


David Cameron’s whispered aside to the Queen was picked up by the microphones, “We’ve got some leaders of some fantastically corrupt countries coming to Britain … Nigeria and Afghanistan, possibly the two most corrupt countries in the world.” He was soon taken to task by a host of experts from UK. Journalist Roberto Saviano who has spent more than a decade exposing the criminal dealings of the Italian Mafia, and now lives under police protection called Britain the most corrupt country on Earth. Given that the criteria for an invitation was fighting corruption, how and why did Cameron fail to invite the leaders of Pakistan, ranked 117 out of 167 countries in TI’s Corruption Index 2015, to the London Summit?


One must apologize to those few of my esteemed colleagues in the WEF’s “Global Agenda Council (GAC) for Anti-Corruption and Transparency” and PACI upset at an “attribution” made of their closed door comments. Governments and/or world organizations have failed to rectify the wrongs because of which hundreds of millions of people suffer in abject poverty and privation, deprived of even the basic necessities of life. Can one really expect the rich nations to allow dismantling of the apparatus from which they derive great wealth?  Providing camouflaged tax and money havens for criminals, do we really expect them to return the loot to the “suffering world”? Only a fail-safe line separates the truth from this blatant hypocrisy. Debating theoretical initiatives for solutions while comfortable in the malaise of pragmatism makes those who can act but don’t part and parcel of the problem, de-facto unwilling accessories to encouraging corruption.


To quote Patrick Cockburn in the “Independent”, “The politically powerful live parasitically off the State’s revenues and are not accountable to anybody.” Given this caveat will our Parliamentarians ever come up with a workable Terms of Reference (TORs) on the “Panama Leaks” or keep on “democratically” filibustering the process till it dies a natural death?

The writer is a defense and security analyst.

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