The United Kingdom has moved to curb abuse of anonymous companies, which are widely used for tax evasion and criminal purposes.
The private Global Financial Integrity said that the Parliament approved a bill that establishes a central, public registry of corporate ownership information.
This is an international first, the organization said.
As Garland Baker noted in a 2013 news article many foreigners who own Costa Rican corporations here do not have their name as the responsible party. A common practice has been to name a lawyer or someone with similar business background to be the president or holder of a power of attorney to handle day-to-day affairs, he said.
The Costa Rican tax agency has threatened to issue a decree requiring the registration of all shareholders in a company. The reason has more to do with getting taxes than with curbing criminality. The agency, the Dirección General de Tributación, wants to be able to levy sales tax when all or part of a corporation’s ownership is transferred.
A draft of a decree has been on the tax agency’s Web site since 2013. And in January the parent Ministerio de Hacienda put forth the decree for public comment.
There have been a lot of objections from lawyers and others about the publication of the names of people who own interest in corporations. The decree that would create a registry would.
seem to make the information a public record
Some argue that a law and not a decree is required to do this.
The action in the United Kingdom would seem to give ammunition to officials here who want to create such a registry.
Until now the only listing of most shareholders has been on the private books of the Costa Rican corporation. Sometimes they would be disclosed. For example, for a firm to do business with the government, the names of major shareholders must be disclosed to avoid officials bidding on major contracts.
Media companies also must publicize the names of their shareholders each year. And a law requires the operators of corporations to surrender the list of shareholders to tax investigators on request.
The proposal would make the list searchable.
“This is a landmark piece of legislation,” said Joshua Simmons. “Anonymous companies are one of the biggest tools for laundering the proceeds of crime, corruption, and tax evasion. Creating registries of the true, human, beneficial owners of each company is a common sense approach to curbing financial crime and the tremendous flow of illegal money. We are very pleased to see the UK take the lead on this issue, and we call on all countries — especially the United States— to follow the straightforward standard set by the UK.”
He is policy counsel for Global Financial Integrity, which says it promotes transparency in the international financial system as a means to global development.