On May 13, U.K.’s HM Treasury announced that forty countries have committed to the initiative to automatically exchange beneficial ownership information, and disclose the real person behind a company. The next stage would be the development of a global standard on this exchange. This action is coming due in large part to the Panama Papers. The recent leaks from the so-called “Panama Papers” highlighted the need for more action in the fight against tax evasion, aggressive tax planning, and money laundering.
The term “Panama Papers” refers to the 11.5 million documents from Panamanian law firm Mossack Fonseca that was leaked to German newspaper Sueddeutsche Zeitung and subsequently, shared with more than 100 other international news outlets, including the International Consortium of Investigative Journalists (ICIJ). The data includes information about companies, trusts, foundations, and funds incorporated in 21 jurisdictions and links to people in more than 200 countries and territories. It covers a period of almost 40 years, from 1977 until last December. It has put the spotlight on tax evasion by world leaders, from friends of Russian President Vladimir Putin to relatives of the prime ministers of Britain, Iceland, and Pakistan and as well as the president of Ukraine
At the Brisbane G20 summit in 2014, G20 leaders (including the U.S., U.K., Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, and South Africa) committed to implementing the G20 High Level Principles on Beneficial Ownership Transparency. Since then, the U.K. has already moved on a public beneficial ownership register (to be operative from June 2016). In April 2016, shortly after the announcement of the Panama Papers leak, the U.K., along with Germany, France, Italy, and Spain (the G5 countries), agreed to take collective action on increasing beneficial ownership transparency. Specifically, the G5 countries agreed to share detailed data on the ownership of companies, trusts, and foundations, making it more difficult for actual owners to hide their wealth, income from tax authorities.
The new agreement was unveiled at the spring meetings of the International Monetary Fund (IMF) in Washington, D.C. on Apr. 14-15, 2016. Since the unveiling of the new agreement at the IMF meeting in April 2016, more countries have committed to the initiative to share detailed data on beneficial ownership.