An academic who found it was far easier to set up an untraceable shell company in the US, the UK or Australia than in Jersey says that Jersey’s existing register of beneficial ownership is a better model than the UK public register being proposed.
Professor Jason Sharman undertook a “mystery shopper” study that started in 2011 when he and a team of researchers tried to set up shell companies in 180 jurisdictions – they found that while they were asked for proof of identity and the origin of funds in offshore centres, the same processes were not followed in countries including the US and the UK.
Professor Sharman – who is due to update that study at a Jersey Finance event in London tomorrow – says that the push by countries such as the UK for a public register of beneficial ownership runs the risk of creating a less useful system than the Jersey model, which is not public but which requires information to be checked and verified.
He said: “One of the things that troubles me about the public register is that there is so little track record of it having worked in the past, unless it’s supported by registered corporate service providers.
“For me, the worry is how do you know it’s going to work, particularly when in the UK and Australia, corporate service providers are not collecting the information that they should, and particularly when you do seem to have a system that works pretty well and is tried and tested and we have found that jurisdictions with regulated corporate service providers in the main follow those rules.”
The updated report due to be released tomorrow afternoon builds on Professor Sharman’s previous Global Shell Games work published in 2014, which tested beneficial ownership standards at 3,700 providers in 180 countries by impersonating a range of would-be money launderers, corrupt officials and terrorist financiers soliciting offers for prohibited anonymous shell companies.
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