The BBC's File on 4 programme last night had the above title. I must declare an interest. I featured in the programme, which can be listened to here.
As the BBC said in the publicity for the programme, I argued in the programme that:
Setting up a bogus company is as easy as surfing the net, says Richard Murphy of the Tax Justice Network. Mr Murphy told File On 4 that UK company law makes it simple for corrupt politicians from abroad to register sham companies in the UK.
"If you wanted form a UK company with nominees the first place you would start is Google and simply type in 'UK company with nominee directors'.
"We come up with a company straight away that is offering to form a UK company with nominee directors"
Nominee directors and shareholders will be registered at Companies House without the firm's real shareholders or directors being revealed.
"Some amendments were made in the company Reform Bill asking for a form of disclosure of who really runs a company to be required by law. And the Government put a lot of effort into ensuring that was not part of the bill.
He said the Government saw this as too much of a burden on companies but in reality it is a licence to commit fraud. However Hilary Benn International Development Secretary said the Government wasn't convinced of the need for a change adding, "in the end in regulation you have to strike a balance."
He also said an EU money laundering directive would make a real difference.
I should substantiate the claims I made. This web site was used for the programme - what I said on air was read straight from it. It supplies:
- A cheap company formation, for £32
- A nominee registered office service so no one knows where your are for £50 a year
- A nominee company secretary service for £49.95 a year
- A nominee director service for £125 a year
- A nominee shareholder service for £100 a year
- Help a company open a bank account in Lithuania for £200
- Provide a debit card on that bank account for £450.
Now I'm not saying that a single customer of this company, or the company itself has done a thing wrong. I have no evidence that they have. But for £1,007 you could have a company with which you have no provable legal association which has a bank account at a bank you have never visited with a debit card that can be charged against that account, which is one of the traditional ways of money laundering.
To set this up is legal in UK company law.
As I said in the programme, I think it a neglect of its duty that the UK government is not taking action to stop this in the Companies Bill now before parliament, but it is not. Put simply, that failure shows that they are not serious about tackling money laundering, tax evasion or organised crime.
It's not too late. The government could change its mind. I hope it does.
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So Hilary Benn said ‘in the end in regulation you have to strike a balance’. Interesting, as a practicing accountant I have to on a daily basis deal with the inept legislation this government is responsible for, but lets look at the Money Laundering and Fraud Acts I haven’t seen a ‘balance’ struck when these were thrust upon us and put our liberty at risk.
This comment from Benn is another example of this governments inept ability to do the right thing, and the effort they put into ensuring the amendments did not make the bill, sleaze and more sleaze from this government.
Will they only be happy when the UK is used for money laundering and all the decent people have left these shores?
Richard
I heard the programme the conventional way, on the radio, and I agreed with its thrust and with your contribution.
I would love someone to pose a question to Tony Benn about his opinion on his son’s apparent lack of interest in trying effectively to deal with the UK’s complicity here. Apart from crime and tax evasion our lax rules in this respect contribute to corruption which is in general a huge problem for the developing world and, by extension us, as the developed world has in many ways to pick up the tab for third world corruption. That is part of Hilary Benn’s brief and he seems to be rather sanguine about this aspect.
On a more flippant note, I have noticed that your voice sounds quite similar to Dr David Starkey’s? Are you by chance in some way related?
Regards
Roger
[…] Regular readers know I take a strong stance on ethics. I’m pretty much in full agreement with the position that Richard Murphy takes on the social aspects of taxation. His may be a minority voice but it is getting a lot of attention at the moment. And rightly so in my opinion. On the other hand, I have a hard time with the heavy handed way in which the SEC responds to stuff like Enron with SOX and now the Silicon Valley options backdating scandal. There is an explanation for the way the SEC reacts. […]
Jason and Roger
I hope you got the feeling I was annoyed at least in part as a practitioner. The argument that Companies House could not possibly be expected to identify beneficial ownership, that people might lie and that this was a burden on business all struck me as horribly hollow when presented by Hilary Benn / DfID. Afterall, we have to do this, and are not allowed room for mistakes.
I sincerely hope that this hypocrisy (there’s nothing else to call it) will end. That’s why I’m happy to work on exposing it.
And no, as far as I know I am no relation of David Starkey
Richard