World leaders pledge to clean up corruption

World leaders pledge to clean up corruption

20 May 2016

An anti-corruption summit held in London last week reached several key agreements to help tackle worldwide corruption.

The summit will have important consequences for big companies hiding their money in certain tax havens and on the UK property market, where foreign companies will be forced to declare their interests in any property owned.

The summit made headline news for the wrong reasons before it had even started. Thanks to a blunder from David Cameron, the summit gained more press coverage than it otherwise might have received.

The Prime Minister admitted to making an unforced error when he was recorded describing Nigeria and Afghanistan as ‘fantastically corrupt’ in conversation with the queen.

The Nigerian president apparently hit back at Mr Cameron by suggesting that western countries need to do more to help them tackle corruption.

Muhammadu Buhari, who was elected after pledging to clean up corrupt practices in Nigeria, acknowledged that his country had a problem with his corruption, but went on to suggest that western countries were part of the problem because they did little to help return stolen funds to their rightful territories.

Anti-corruption campaigners ague that the lucrative London housing market has been a magnet for these stolen funds for a long time. And foreign money, legitimate or otherwise, has pushed up property prices in the capital and elsewhere.

At the summit, David Cameron announced that foreign companies that own property in England and Wales will soon be required to declare that interest and who actually benefits from the ownership. This policy will, the PM hopes, go some way towards cleaning up London as an international centre for money laundering.

In addition, Britain was joined by five other countries in announcing a new ‘register of beneficial ownership’. Britain, Afghanistan, Kenya, France, the Netherlands and Nigeria will all require companies to publish registers of who really benefits from the ownership of their company.

Some of the most infamous tax havens, including the Cayman Islands, Jersey, Bermuda, the Isle of Man and the UAE have agreed to join a separate group that shares lists of beneficial owners with other governments, but not in public.

Representatives from many other prolific tax havens, however, stayed away from the summit. And David Cameron failed to force full transparency on the British Virgin Islands and other British overseas territories, which collectively account for between a quarter and a third of global offshore activity.

The signal to anti-corruption campaigners is that we still have a long way to go in order to completely stamp out corrupt business practices.

Miles Grady, Director of Umbrella.co.uk said: “It’s good to see the international community coming together to tackle corruption, because that’s the only way to stamp it out completely.

“The direct impact on contactors and small business owners will probably be limited, but there are some ways they might be affected. The demand for homes in the UK could dip, making it cheaper to buy a house. And small operators might find it easier to compete with bigger companies if the bigger companies see their tax loopholes squashed. We welcome news from this summit and encourage the government to do more to tackle corruption.”

For more information call the team at Umbrella.co.uk 01625 546 610 or email  team@umbrella.co.uk