Article paru dans Guardian le 24 Mars 2010

Britain plans to seize control of tax haven

• UK could suspend Turks and Caicos parliament
• Inquiry finds ‘political amorality, incompetence’

The government yesterday revealed extraordinary plans to seize control of a Caribbean tax haven after a report warned there was a “high probability” that the Turks and Caicos Islands are a centre of systematic corruption.

The Foreign Office said that parts of the constitution of the British overseas territory would need to be suspended “including those relating to ministerial government and the House of Assembly, initially for two years”.

The move, revealed in a written answer to parliament by Gillian Merron, a Foreign Office minister, followed the publication of an interim report by a commission of inquiry into the Turks and Caicos Islands. It comes at a time when Gordon Brown and other world leaders have called for greater financial disclosure from tax havens.

The commission, led by Sir Robin Auld, a former lord justice of appeal, was set up last summer to investigate a stream of allegations that the islands were riddled with officially condoned dishonesty.

The inquiry’s interim report said yesterday there was a high probability of systematic corruption or serious dishonesty, adding there were “clear signs of political amorality, immaturity and of general administrative incompetence”.

Auld’s report – drawn up with the help of senior counsel Alex Milne, a London barrister who represented soldiers at the Bloody Sunday inquiry – concluded that the constitution of the islands should be suspended.

It also makes detailed demands for changes to be made in company law on the islands, including one that says “all corporate bodies and those acting for others in a trustee or nominee capacity should be required to disclose the true beneficial ownership of or interests involved in to any public body required or seeking to exercise due diligence in contemplation of the grant of crown land”. The inquiry also called for a strengthening of corporate law and heavier sanctions for breaches of it.

One of many transactions that attracted the criticism of the inquiry was a loan of $1.5m (£1.07m) to three members of the ruling Progressive National party that was not declared to other party members. The loan was granted by the Belize Bank, whose chairman is Michael Ashcroft, the former Conservative party treasurer and one of the party’s biggest donors. The bank itself is not in any way implicated.

Milne described ministers on the islands as overseeing a culture of “serious dishonesty”. He expressed concern about the “sheer volume of money” that washed through the islands’ system with no accompanying paperwork.

The London lawyers do not mention in their report specific fears about money laundering and tax evasion. But well-placed sources confirmed the commission had unearthed a welter of evidence for such practices.

“There are strong suspicions that a lot of overseas money is coming in and the system is designed in such a way that it hides the source of those funds,” said one source.

“There is very little due diligence done on this money with few questions being asked locally about where it comes from. There does seem to be money-laundering going on there but whether it is from criminal funds or not is not clear.”

The Turks and Caicos Islands, located 600 miles south-east of Miami, have the same status as the Falkland Islands. They have an independent government but come under the official sovereignty of the Queen.

Merron said that the order to take control of the islands’ ruling institutions would come into effect once the final commission report is published next month. “Powers and functions currently exercised by ministers would be exercised by the governor acting in his discretion.”

Court transcripts from the commission’s hearings, which ended last month, show Milne homing in on enormous donations to the PNP with $2.9m arriving in three months alone in 2006, before the last general election. “Those sums alone amount to more than $550 for every registered voter in the territory,” Milne said.

He went on to criticise PNP leaders for concealing the extent of its debts from other members – something the treasurer and deputy premier, Floyd Hall, has admitted to.

“This amounts to an admission of serious collective dishonesty on the part of all concerned,” Milne said. “It gives one great concern as to what other matters have been concealed or misrepresented by these same individual members.”

http://www.guardian.co.uk/business/2009/mar/17/tax-haven-turks-and-caicos