MISUSE OF CORPORATE VEHICLES
today’s world, there is a growing need for all
financial centres, wherever they are, to combat the
abuse of corporate vehicles. The ever-present threat
of terrorism and the ongoing exposure of corporate
scandals demonstrate as much.
action should be taken on the basis of facts, not
limited and partial research by the Organisation
for Economic Cooperation and Development
into the misuse of corporate vehicles has been used
to form policy by other organisations controlled by
OECD members, such as the European
Union and the Financial
Action Task Force (FATF).
it deals with problems among its own membership, the
OECD will fail to tackle the issue of international
criminality effectively. International regulation
will only work if it is based on a
level playing field.
November 2001, an OECD report, Behind the Corporate
Veil: Using Corporate Entities for Illicit Purposes,
urged governments and regulatory authorities to ensure
they could obtain information on the beneficial ownership
and control of corporate vehicles in order to combat
their misuse for illicit purposes.
OECD’s proposals have serious implications for
personal financial privacy and for the economies of
many non-OECD countries.
the OECD’s data is weak and the organisation
is coy about turning the spotlight on itself.
report only looks at countries outside the OECD. It
virtually ignores such ubiquitous corporate vehicles
as US limited liability companies (LLCs), Luxembourg
1929 holding companies and Swiss administered trusts.
ITIO believes that new international standards must
be rigorously based on fact. OECD members must be
reviewed as much as non-members.
with the Society
of Trust and Estate Practitioners, the
ITIO commissioned international law firm Stikeman
Elliott to plug the gaps in the OECD’s
resulting study, Towards a Level Playing
Field: Regulating Corporate Vehicles in Cross-Border
Transactions takes proper account of
the major finance centres within the OECD.
the first time, it provides a comprehensive analysis
of the regulation of corporations, trusts and limited
partnerships in fifteen OECD and non-OECD countries.
a Level Playing Field reveals that leading
OECD member states now actually lag behind regulatory
developments in the principal non-OECD financial centres
in important respects.
results may come as a surprise to those who think
big countries have nothing to learn from small ones.
taking a global and inclusive view, Towards
a Level Playing Field clearly demonstrates
that the only way to develop new standards for corporate
vehicles is to proceed on the basis of non-discrimination
level playing field.
criminals may simply turn to those countries in the
OECD itself where regulation is weaker.
Read more about
Towards a Level Playing Field and download
the full report.
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