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UK hails progress, defends tax havens at corruption summit

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Prime Minister David Cameron hailed progress on pursuing corrupt individuals at an international summit on Thursday, but rejected accusations he had failed to deliver transparency on Britain's overseas tax havens.

[LONDON] Prime Minister David Cameron hailed progress on pursuing corrupt individuals at an international summit on Thursday, but rejected accusations he had failed to deliver transparency on Britain's overseas tax havens.

More than 40 countries signed a declaration to "pursue and punish" those who perpetrate or facilitate corruption, and individual nations agreed a range of initiatives to open up anonymous company ownership and recover stolen assets.

"Today we have seen the world unite against a shared enemy. Countries have gone further than ever before in condemning corruption and pledging to drive it out," Mr Cameron said.

The meeting, which included the leaders of Nigeria, Afghanistan, the World Bank and the International Monetary Fund (IMF) as well as US Secretary of State John Kerry, was held amid outrage over the revelations in the Panama Papers.

The leak of 11.5 million documents from Panamanian law firm Mossack Fonseca revealed how global elites use anonymous companies, often incorporated in offshore hubs, to move their money around without being detected.

Mr Cameron announced that Nigeria, France, the Netherlands, Afghanistan and Kenya would, like Britain, be creating public registers of who ultimately owns shell companies.

France goes the farthest, including trusts as well as companies.

Six other countries - Australia, Georgia, Indonesia, Ireland, New Zealand and Norway - pledged to work towards a register.

Campaigners hailed the move as significant progress, but expressed disappointment that it was not extended to Britain's overseas territories.

A short walk away from the summit, activists set up a "tropical tax haven" in London's Trafalgar Square, complete with sand, palm trees and financiers in suits and bowler hats reclining in deck chairs.

Inside, Mo Ibrahim, the Sudan-born telecoms tycoon whose eponymous foundation pushes for better governance in Africa, had described such companies as "getaway vehicles for corruption".

"Legitimate business has no need for anonymous companies. Please ban them," he urged Mr Cameron.

In his closing remarks, the prime minister defended British financial hubs such Cayman Islands, Jersey and Isle of Man, saying they had made "exemplary" progress on transparency.

The British Virgin Islands, where many of the companies named in the Panama leaks were incorporated, was notable by its absence.

Mr Cameron conceded that "we should keep on going towards that gold standard" of full public access to company information.

But he accused campaigners of "picking on small islands", adding: "I'd like to see the United States of America, China, everybody do that."

Earlier, US Secretary of State John Kerry told the summit that corruption was a global challenge akin to terrorism, and said the London meeting represented "the beginning of something different".

"Corruption, writ large, is as much of an enemy because it destroys nation states as some of the extremists we're fighting," he said.

Washington is being urged to do more on addressing the situation in states such as Delaware, where anonymous companies can be set up for a few hundred dollars.

Afghan president Ashraf Ghani urged the summit to maintain the momentum for change, saying: "Anti-corruption should not be a fashion that is discarded with the next set of elections."

Mr Cameron began the summit on the defensive, after being caught on camera bragging that the leaders of some "fantastically corrupt" countries were attending, naming Nigeria and Afghanistan.

Nigerian President Muhammadu Buhari, who has embarked on a widespread anti-corruption campaign since taking office last year, responded with a pointed request that Britain return assets stolen by corrupt officials who fled to London.

Mr Cameron announced a new international centre in London that will help coordinate the prosecution of corrupt individuals and the recovery of assets across borders.

He also announced plans to force foreign companies owning British property or bidding for government contracts to reveal their ultimate owners, as part of the new public register.

"If you don't know who owns what you can't stop people stealing from poor countries and hiding that stolen wealth in rich ones," Mr Cameron said.

Jose Ugaz, chairman of campaign group Transparency International, said the public registers of beneficial ownership will "make it harder to hid, transfer and benefit from corrupt money".

"The summit has galvanised global attention on corruption and how to fight it. But we will need to see the laws in place and enacted before we can claim any victories," he said.

Robert Palmer of campaigners Global Witness said the announcements so far represented "good progress" but "the biggest piece of the puzzle is still missing - the tax havens must open up".

AFP