David Cameron personally sent a letter to the president of the European council arguing that offshore trusts shouldn’t be subjected to new transparency laws.
The letter which was sent in 2013 to the then president Herman Van Rompuy came as the EU was putting together plans to publish a public register with the names of people who own trusts.
A trust is an organisation that controls money or property on behalf of someone else. They can sometimes be used to hide assets offshore.
2013 was a very important year for people who want to stop tax avoidance. In June of that year David Cameron used his position as host of the G8 summit in Lough Erne to set out plans to make it easier for people to find out who holds assets in offshore companies. The EU thought Cameron’s plan was good, but it wanted to go one step further — it wanted to force offshore trusts to become more transparent as well as companies.
This is where Cameron stepped in.
In his letter he said that it might not be appropriate to force trust to become transparent and that it was important to recognise the differences between companies and trusts. Cameron didn’t elaborate on what those differences are and why they are relevant.
Here is the relevant bit from the letter.
Cameron’s letter annoyed Judith Sargentini, the Dutch MEP who led the team drafting the new laws. She told the Financial Times that she saw Cameron’s position as “a danger and a possible loophole.” She also said that that some EU countries thought not scrutinising trusts would be an “underhand way for the UK to get an advantage.”
It appears that Cameron’s letter had the desired effect. When the new transparency laws were introduced last year, they made clear that companies are going to have to reveal their true owners, but didn’t require the same thing from trusts.
The release of the Panama Papers data dump, that revealed the full extent of Cameron’s late father’s involvement with an offshore fund that was set up in Panama by law firm law firm Mossack Fonseca means that people are starting to look closely at Cameron’s opinions on offshore companies and trusts.
A government spokesman told the Guardian yesterday that the reason Cameron wrote the letter was because he was concerned that if countries tried to force trusts to become more transparent it would “detract from other aims he felt were more important, such as tackling shell companies whose ultimate owners are hidden.”