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G8: David Cameron faces 11th-hour battle over objectives

Uphill struggle for prime minister over tax havens, EU-US trade talks and Syrian peace conference
David Cameron and Stephen Harper after a visit by the Canadian prime minister to both houses of parliament on Thursday. Photograph: Reuters
UK Guardian

David Cameron's key objectives at the G8 summit next week – cracking down on tax havens, launching EU-US trade talks and progress to a Syrian peace conference – were still meeting resistance on Thursday as he battled to win over key allies.

The prime minister is chairing the G8 summit in Northern Ireland on Monday and Tuesday next week, and is battling to break through the interlocking diplomatic and economic agendas. He looked to be closer to a breakthough on improving tax co-operation in UK overseas territories and crown dependencies.

Bermuda joined the British Virgin Islands by apparently accepting that it should sign an existing OECD agreement to transfer tax information on request. The tax justice and aid charities have been pushing Downing Street hard to get the UK Overseas Territories to commit, and see it as essential of the UK is to have wider credibility on the tax justice agenda. The Bermudan premier, Craig Cannonier, said: "I want to clarify that Bermuda is strongly committed to joining the multilateral convention on tax information sharing.

"Bermuda is a well regulated jurisdiction and has always been at the forefront of international efforts to fight tax evasion and aggressive tax avoidance. I am encouraged that other overseas territories are also committed to joining the convention."

Earlier Cannonier had hinted that he was only willing to agree to sign in principle.

Downing Street officials admitted that the revelation in the Guardian last week of Cameron's plan to summon the crown dependencies to a meetingbefore the G8 summit itself in a bid to press them to end tax secrecy had led to resistance from some countries.

The prime minister was meeting continued resistance from his Canadian counterpart, Stephen Harper, over critical plans to require countries to reveal the true beneficial owners of shell companies and trusts. The measure is vital to combatting money laundering, fighting tax evasion and turning tax information exchange into something meaningful.

Cameron laid on the diplomatic red carpet for Harper, giving him the rare honour of speaking to both houses of parliament, a visit to the Queen and a lengthy bilateral meeting at Downing Street. But Harper is worried about exposing private Canadian tax affairs and fears complications arising from Canada's federal structure.

In a crucial advance for Cameron, a US Treasury spokesman said: "We view the G8 as an important opportunity to make progress on cracking down on criminal and illicit actors who use shell companies to hide their true identity."

The US Treasury said "Increased transparency including the availability of beneficial information to law enforcement is an essential element of the US broader effort to enhance financial transparency which also includes strengthening customer due dilligence requirements for US financial institutions with respect to beneficial ownership of legal entity account holders".

The remarks suggest that Barack Obama is not going to support public registries of beneficial ownership, limiting access to tax authorities.

Cameron is also hoping to launch EU-US trade talks on Monday, but in an attempt to persuade a reluctant French government to give the go-ahead for the talks, the European commission is ready to give EU governments, including France, a much greater say in negotiations.

On Syria, Cameron is hoping that bilateral talks with President Vladimir Putin on Sunday could lead to a breakthrough on a peace conference. 

Cameron's tax wishlist at G8

1. Strong G8 political support for a new OECD action plan due to be given to G20 finance ministers in July setting out how to end corporation tax loopholes covering issues such as transfer pricing, intellectual property and country by country reporting. Final outcome in two years

2. Clear support at special meeting on Saturdayfrom UK crown dependencies and overseas territories to sign OECD agreement on transfer of tax information on request.

3. G8 political support to develop worldwide standard on automatic tax information transfer based on a pilot agreed, but not implemented between the US, G5 and some UK Crown dependencies. This currently excludes developing countries.

4. A G8 agreement on beneficial ownership, a means of revealing the true identity of shell companies, mainly in tax havens. The register will either be accessible to public or tax authorities.

5. Agreement to help developing countries build their tax base and handle tax information.

3 Responses to “G8: David Cameron faces 11th-hour battle over objectives”

  • Mark (16/06/2013, 10:53) Like (0) Dislike (0) Reply
    London is a money laundering Mecca. How laughable it is for Cameron to pressure the OTs on these issues.
  • hands (16/06/2013, 14:15) Like (0) Dislike (0) Reply
    I can see the hand of the the fco behind this action
  • ttt (16/06/2013, 22:44) Like (0) Dislike (0) Reply
    There will be a serious marketing now of the peir park and airport.

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