World Economy

Only 6 Nations Make Anti-Graft Vows

Only 6 Nations Make Anti-Graft VowsOnly 6 Nations Make Anti-Graft Vows

The Anti-Corruption Summit in London on Thursday saw heads of state, ministers and diplomats from 40 countries vow to double down on what British Prime Minister David Cameron dubbed the “cancer” of corruption—however only a handful of countries announced firm measures.

The summit was about backhanders and bribes, but the definition of corruption was widely drawn. The preoccupation was with cleaning up the financial system rather than rotten governments. There are many places in the world where the rich and the sometimes crooked can hide their wealth out of the reach of the authorities.

"Tackle corruption and you tackle poverty and terrorism"  Cameron proclaimed, news outlets reported.

In an attempt to demonstrate that the UK is committed to substantive action to tackle its own problems with money-laundering and corruption, Cameron announced that Britain will create a public register of all foreign companies which own property or win public contracts in the UK. This will mean that “corrupt individuals and countries will no longer be able to move, launder or hide illicit funds through London’s property market.”

Some 44,000 London properties are owned by overseas businesses, as well as approximately 60,000 outside the capital.

Following the meeting at London’s Lancaster House, leaders made a number of promises to increase transparency, fight bribery and bring the corrupt to justice.

But just five nations made firm commitments to join the UK in publishing the true identity of the owners of foreign companies operating in their countries.

Only Britain, France, Kenya, Afghanistan, the Netherlands and Nigeria put pen to paper. A further six nations, including Australia, Ireland and Norway, have said they will explore similar measures.

Behind the Curtain?

Eleven more countries have announced they will join up to a scheme, headed by the European Union’s five biggest economies and set up in response to the Panama Papers leak, to exchange information on beneficial ownership with other nations, but not publicly.

The United Arab Emirates, the Cayman Islands, Jersey, Bermuda and the Isle of Man are some of those that join 29 other countries already signed up to the initiative.

However the United States, which stands accused of being one of the worst offenders, did not join the scheme, neither did the British Virgin Islands—one of the world’s most popular tax havens.

The absence of countries like the BVI and Panama, both of which are at the center of recent tax avoidance controversies, undercut the summit’s effectiveness.

Failure to secure commitments from countries like the BVI has been a source of embarrassment for Cameron, who has been under pressure to bring the UK’s overseas territories and crown dependencies in line.

Barry Johnson, head of advocacy at ActionAid, said that as a result the summit will be “remembered for what has not been achieved”.

“Despite the largest tax scandal in history, David Cameron has failed to tackle the problems in the UK’s own backyard. The veil of secrecy over British tax havens will continue to make it possible to hide the proceeds of corruption and dodge tax in the world’s poorest countries,” he said.

Other announcements include the creation of a Global Forum for Asset Recovery, which will bring together governments and law enforcement agencies to expedite the return of stolen assets to countries like Nigeria.

Nigeria Blames UK

Nigerian President Muhammadu Buhari, and Chukwuka Utazi, a member of Nigeria’s committee on financial crimes and corruption, have criticized the UK for providing a safe haven for ill-gotten funds.

Buhari, who was elected on an anti-corruption ticket, has announced that Nigeria would be joining the Open Government Partnership, an international body that works to increase transparency in government.

OGP chief executive Sanjay Pradhan called this a “huge step forward” for Nigeria, saying it signaled the country’s intention to putting tackling corruption at the heart of its reform agenda.