Government refuses to adopt controversial European court ruling that risks playing into hands of tax evaders
Protected: Patrick Hansen rented jets to oligarchs
The Government has refused to adopt a controversial European court ruling that risked playing into the hands of tax evaders.
In an unexpected Brexit benefit, Britain will continue to lead Europe in the fight against wealthy individuals and firms using secretive tax havens to stash their wealth.
Britain could have abided by a European Court of Justice (ECJ) ruling last year that the right to privacy trumps the public’s right to know who owns a business. But following Brexit, the UK is no longer obliged to go along with ECJ decisions. After The Mail on Sunday drew attention to the issue, the Department for Business said the public would now continue to have free access to documents at Companies House.
‘I welcome the decision,’ said Dame Margaret Hodge, who chairs an all-party committee of MPs on anti-corruption. ‘Knowing the identity of people who own and control companies is the first and most important step towards a stronger economy. Sunlight is the best disinfectant to keep fraudsters, human traffickers, kleptocrats and oligarchs at bay.
The ECJ case was brought by a Luxembourg businessman, Patrick Hansen, who runs private jet firm Luxaviation, which has counted wealthy Russians among its clients. Several of its planes were grounded after the invasion of Ukraine triggered sanctions against oligarchs. Critics say the abuse of tax havens enables economic crime on a vast scale. The UK’s approach is in stark contrast to EU members including Ireland and the Netherlands.
After the ECJ judgment, they rushed to deny the public access to company ownership registers.
Dan Neidle, founder of non-profit Tax Policy Associates and whose investigations into Nadhim Zahawi’s financial affairs forced him to quit as Conservative Party chairman last month, said there is a ‘powerful argument’ for transparency. He said publicly available registers of company ownership ‘send a strong signal that dirty money isn’t welcome’, adding: ‘They also greatly increase the risk for tax evaders, sanctions busters and criminals. Even if the authorities don’t spot you, a nerd with a laptop might.’
The Government’s move heaps pressure on British tax havens in the Channel Islands and Caribbean to follow. They promised to open their registers to public scrutiny by the end of this year, but are using the ECJ ruling to drag their feet.
Offshore financial centres contacted, including Jersey and the Cayman Islands, said they were still considering the ECJ ruling.
