In May 2016 David Cameron hosted an International Summit attended by over 40 countries and pledged to work for “so long as there is breath in my body” to tackle what he described as the “cancer” of corruption. It was an important moment. The British government did what few others have done before and recognised that corruption is a global issue – not just one isolated to developing countries and notorious tax havens.
Cameron was clear that corruption is “one of the greatest enemies to progress of our time”. It drives poverty, crime, human rights abuses, props up abusive regimes and keeps fledgling economies dependent on foreign aid. The money accrued is diverted from vaccines and healthcare for some of the most vulnerable communities in the world. It could be spent educating millions more children and creates unfair disadvantages for those job-creating companies doing the right thing and playing by the rules. Corruption is devastating for the global economy, undermines political security and entrenches inequality.
There is little doubt that the Summit should have provided a vital forum for building alliances and created worldwide momentum to help tackle the thorny issues that lie at the heart of these crimes. However, it has been disappointing that the action taken has failed to meet the ambition of the rhetoric employed, or the pledges made to bring greater transparency to corporate ownership, to prevent criminal money flooding our property market and to bring wrong-doers to justice have been watered down or forgotten about altogether. Fighting corruption has been kicked into the long grass as Brexit dominates the political and media agenda.
But amidst the toing and froing between Westminster and Brussels on the details of the negotiation, there is a vital question that is being lost. It’s a question which – if approached with sufficient depth and introspection – should bring these issues to the forefront of the Brexit discussions. It is simply this: what kind of country do we want to be after we leave the EU?
At the very start of this year, Theresa May laid out her vision for Global Britain, an outward-looking country building new alliances and strengthening old ones, a country that prospers itself whilst driving development globally. Today, on the UN’s Anti-Corruption Day, she has a real opportunity to show what that means in practice. For what is more characteristic of a new Global Britain than a country with clear measures to tackle corruption not simply on its own shores, but challenges others to meet the ambition pledged at the Summit in London? As we negotiate new trade deals, now is the opportune time for the Prime Minister to act, making good on the UK Bribery Act and pursuing UK and UK-listed companies committing bribery and corruption overseas. Now is not the time to backslide on principles for deals.
What is more indicative of the national character we want to display than a renewed commitment to ensure criminals, dodgy corporates and corrupt leaders channelling money into our country face exposure and criminal charges. But this is near impossible without adequately funded law enforcement and a fit for purpose legal framework that empowers them to hold companies and professional enablers to account.
The Government’s Anti-Corruption Strategy is yet to be published – I hope it comes soon as it is sorely needed. As Ministers consider how to act to end the complex web of legal loopholes exploited by those who seek to hide ill-gotten goods or redirect public funds for their own benefit, they should look to address the following five tests, developed by Global Witness, which would truly allow us to say we are a country fighting the cancer of corruption.
First, the Government must act to bring greater transparency to the UK’s tax havens. Last year they supported the introduction of a public register of beneficial ownership in all countries – including UK overseas territories and crown dependencies – to stop corporate secrecy enabling tax evasion and corruption. Progress on this has slowed with the Foreign Office rowing back on this commitment, saying a public register would only be established if this becomes a ‘global standard’. In the wake of the recent Paradise Papers, which showed widespread use of UK tax havens by anonymously-owned companies and shady individuals, this is simply not good enough.
Second, the Government must stop money derived from criminality entering the UK property market. Action was pledged at the Summit last year, but our country continues to offer a safe haven to corrupt individuals by allowing anonymous companies to buy property. This makes it far too easy for criminal gangs and corrupt leaders to launder money through luxury property by hiding their identities and disguising the source of their funds. Global Witness has investigated this extensively, most recently highlighting the £147 million London property empire linked to the former head of the Kazakh secret police who was accused of murder, torture and money-laundering.
Third, companies that commit economic crimes must face the full force of the law. In January the Ministry of Justice opened a call for evidence about new criminal offences which would punish fraudulent, dishonest and harmful activity committed by companies. The call for evidence was closed in March but there has been no response from the Justice Minister. The Government should stop dragging its feet on this crucial update to the law if it intends to create an economy that ‘works for everyone’.
Fourth, reform is needed to the immigration system to tighten rules which allow those investing vast sums of money in the UK to obtain the right to reside here. There are concerns these so-called ‘golden visas’ are being abused by criminal networks, particularly as questions have been raised about the due diligence procedures in place for assessing applicants. Greater rigour of scrutiny should also be applied to those individuals who travel on similar visas bought in jurisdictions, such as St Kitts & Nevis, Dominica, and Vanuatu, which offer visa-free access to the UK.
Finally, the Government needs to appoint a new Anti-Corruption Champion. Sir Eric Pickles, who took up this vital role in 2015, stood down from Parliament at the last election and the post has remained vacant ever since. Without leadership pushing cross-departmental cooperation, the agenda is sure to flounder.
As was recognised at the 2016 summit, there is no overnight solution that will end corruption altogether – we need a package of reform to make a difference. However, as a blueprint for change they would act as both a symbol of Britain’s intent going forward and as practical way of creating real obstacles for those looking to game the system for their own benefit. They would, I believe, make a real difference. Meeting these tests is not only the right thing to do – it is also befitting of a truly Global Britain.
Charmian Gooch is co-founder and director of Global Witness