Symposium on systems of financial secrecy summary report

Conclusion

Conclusion by Louise Russell-Prywata and Victoria Gronwald

This symposium highlighted how financial secrecy can have negative impacts on public funds, a fair tax system, sanctions enforcement and fair public procurement, as well as fostering financial crime. Several presenters highlighted that while there are solutions developed often in international fora and implemented nationally, these solutions have important weaknesses - such as loopholes or weak enforcement. One such loophole that received particular attention in the symposium was the legal arrangement of the trust.

There is a case made to reflect on whether we currently define tax crimes and corruption too narrowly and therefore let certain practices go unnoticed or unregulated. Regulation against financial secrecy, and the use of sanctions and measures such as greylisting, is also not equally implemented and enforced across jurisdictions. Related to this we need to pay attention to the continuing inequality of representation in international standard-setting, with in particular developing countries being underrepresented in many important fora.

The logical solution to secrecy is transparency, and this logic is increasingly well supported by the evidence, including the research presented in this symposium. Transparency however can only be part of a solution to systems of financial secrecy and cannot be taken for granted. This for two reasons:

1. Transparency is never complete. There are always decisions involved in what is being made transparent, and what isn’t. Sometimes the gaps are intentional and justified exemptions while sometimes they are unintended loopholes. We constantly need to review what falls under transparency requirements and what doesn’t, and whether the scope is fit for purpose.
2. Transparency needs to be accompanied by accountability. Just because information is out there does not mean that it is communicated, understood or utilised. Transparency measures in law need to be accompanied by effective implementation of these in practice, and use of the information to prevent and detect wrongdoing. All of this requires adequate human capacity and financial resources.

The variety and quantity of excellent submissions we received for this event, and the diverse programme of academics, policy makers, advocates and journalists, proved to be fertile ground for exchanging ideas and forging new connections. We hope that we, along with participants, will leverage these going forward to continue to deepen the links between academics and practitioners working on financial secrecy issues.

Finally, we wish to thank all the speakers, and everyone who helped organise and participate in the event. In particular, our gratitude to Prof Armine Ishkanian, Executive Director of the Atlantic Fellows for Social and Economic Equity programme for her support of this event both in concept and in co-funding, Prof Mike Savage for his encouragement and support for this collaboration between the III, AFSEE and Open Ownership, and Miranda Saul of LSE III, Isabelle Kermeen and Kathryn Davies of Open Ownership for their organisational work.