David Cameron visited the city-state on Tuesday to make a speech on anti-corruption in which he promised to fight against corrupt foreigners who use “anonymous shell companies” to buy properties in the UK.
“I’m determined the UK doesn’t become a safe haven for corrupt companies,” he said, saying some companies are able to hide behind a “shroud of secrecy” and so cannot be held accountable.
Cameron, who was accompanied on the trip by 31 British business leaders, said the international community needs to step up and tackle the “cancer of corruption”.
He said this year the UK Government will introduce a new public land registry making it easier to find out which companies own properties in England and Wales, while also extending this to cover overseas companies. This, he said, would be a “new era of corporate transparency”.
A shell company is a non-trading company which is either used as a vehicle for a certain financial purpose or kept dormant for future use.
Cameron described corruption as one of the “greatest enemies of progress in the world”, hindering efforts to drive global growth.
He also hopes increasing transparency and preventing the use of “laundered cash” will stop the rising property prices in London.
“I want Britain to be the most open country in the world for investment,” he said. “But I want to ensure that all this money is clean money. There is no place for dirty money in Britain. Indeed, there should be no place for dirty money anywhere.”
“Gimmick”
James Quarmby, head of private wealth at international law firm Stephenson Harwood, said Cameron’s “eye-catching initiatives” will do little to change the reality on the ground.
“It is difficult to see what difference the publication of a list of properties held by offshore entities will make,” he said. “All this information is already held on HM Land Registry and it is equally open to the public and the law enforcement agencies to search that database to identify the owner of a particular property.
“Essentially, therefore, the new list is simply a duplication of existing public domain information. The word ‘gimmick’ comes to mind.”
“Nothing tangible”
Quarmby also said there is already legislation is already in place for publishing information on the beneficial ownership of companies.
“Unfortunately for the prime minister, he does not have the power to force Cayman, Panama and various other jurisdictions to publish data on the ultimate beneficial ownership of companies incorporated in those jurisdictions.
“As such, his announcement in Singapore gives us nothing tangible.”
Quarmby also pointed out that people regularly use offshore companies to acquire UK property for commercial reasons, including tax efficiency.
“This is a long way from the ‘corrupt practices’ of which the prime minister complains,” he said.
