Essay --

Transparency and exchange of information – No place to hide Over the years, the focus of the international community has been on transparency and the exchange of information. These have become more urgent in the aftermath of the global recession which has strained public revenue flows in both developing and developed countries. Transparency is important on a local and global scale because it is a means to mitigate financial crimes. It protects investors, as well as public revenue. Transparency also generates public trust in our systems and increases confidence and stability in the business environment. The drive towards global transparency and automatic exchange of information has gained new impetus after the Foreign Account Tax Compliance Act (FATCA) was rolled out by the US and following the relevant intergovernmental agreements which are being signed in this respect. The ultimate aim of FATCA is to make it more difficult for persons liable for US taxation to evade payment of those taxes by concealing assets and income in non-US institutions. It is an attempt to lift the veil of privacy in the financial services worldwide and to utilize the financial institutions as reporting and enforcement agents on behalf of the US tax authorities which would be both time consuming and costly for the financial institutions. Furthermore, tax evasion and transparency were the themes of the latest G8 summit which was held in Ireland in June, 2013. During that meeting, the G8 nations consented to tighten rules on corporate tax that sometimes allow companies to shift income from one nation to another in order to avoid taxes. They agreed that companies and legal arrangements should have to disclose their true owners and that this information shoul... ...tions received will be assessed and form the basis of appropriate policies which will, in turn, contribute to the revision of their AML / CTF regulation regimes. Finally, the FATF, the global standard-setter with respect to anti-money laundering and combating the financing of terrorism (AML/CFT), recognises the importance of UBO information and the access to it. Recommendations 24 and 25 state that countries must take measures to prevent the misuse of legal persons and legal arrangements for AML/CFT by ensuring there is adequate, accurate and timely information on beneficial ownership. This information needs to be accessible in a timely fashion by competent authorities and therefore all countries should consider measures to facilitate access to beneficial ownership and control information from financial institutions and Designated Non-Financial Business Providers.