…could be the G8’s Plan ‘B’ in the event they fail to agree on a pubic register of beneficial owners of shell companies.
In fairness to Canada then, that country may not be the only ‘spoiler’ at next week’s meeting, at least with respect to this centrepiece of Cameron’s transparency agenda, since both Putin and Obama are also likely to vote ‘nyet’ on Plan ‘A’.
Depending on the outcome of today’s ‘last lap’ meetings in London, PM Cameron should know whether he has done enough to convince the US to change its vote to ‘yes’ as its support is likely key to bringing others on board.
PM Cameron will fight hard for this third but arguably most important limb of his legacy as G8 Chair because it does seem that agreement on the other two; a new mechanism to track where multinationals make their money and where they pay their taxes; and the launch of negotiations for a landmark trade deal between the EU and the United States, will be announced.
Perhaps one of the reasons behind the apathy for Cameron’s Plan ‘A’ is that the phrase ‘beneficial owner’ is imprecise. Indeed, according to UK Justice Harman in the Appellate discussion of Wood Preservation Ltd. V. Prior, these owners are the companies, entities or persons “who do not have mere legal ownership by the mere fact of being on a register but those with the right, at least to some extent, to the deal with the property as if it were their own.”
Importantly however, speaking in the same case, Lord Donavan cautioned that while “a company which does not have the rights of selling or disposing or enjoying the fruits of the company’s shares cannot be called their beneficial owner, any attempt to find an exhaustive definition of the phrase would be rash.'”
Assuming however that a workable definition of ‘beneficial owner’ can be found, there is yet another complication with Cameron’s Plan B.
Although this plan would allow the world’s eight wealthiest countries to set up a private register of beneficial ownership information, it would only be accessible to law enforcement and tax authorities, meaning that the world’s poorest countries, and most in need of the information, won’t be able to get it.
If Cameron cannot get agreement for a ‘public’ register and is forced to support a ‘private’ one, then as made clear by Brendan Cox, a spokesman for the IF global hunger campaign which is backed by 200 pressure groups; “The G8 would have a very difficult time justifying a summit that is supposed to focus on transparency coming up with a system of private registers.” http://www.independent.co.uk/news/uk/politics/david-cameron-may-be-forced-to-water-down-key-g8-aim-over-public-disclosure-of-shell-companies-to-stop-tax-evasion-8654509.html
The G8 meets in four days time.