Britain will become the first G-20 country to publish the identities of the owners of companies registered here. Australia has announced that it will do the same.
We can argue about whether British ministers should force the Crown Dependencies and Overseas Territories to follow suit. The British government does have feudal royal powers which means they could do this, but that isn’t the same as saying they should override local democracies in these countries. (I personally think the UK should use its influence over these countries to make them open up.)
Either way, Britain can’t make the State of Delaware (state motto: Liberty and Independence) publish the names of the owners of companies registered there.
That’s why David Cameron’s announcement today about owning property in the UK is so interesting.
Companies that own property in the UK are going to have to publish the names of their owners, in a publicly-accessible registry. And they will also have to list their owners if they want to get a contract from the UK government.
That will apply to companies equally, whether they are registered in London, Moscow or Delaware.
This is a clever way to project the requirement of openness onto jurisdictions that the UK doesn’t control.
People want to own property in London because it is a safe, free, fair country. But if you want to benefit from the prosperity that comes from living in a free and open society, you have to play by the rules.
I would like to see the UK government extend this principle still further.
Half the cases before UK commercial courts involve companies which are not registered in the UK. The rest of the world depends on our reputation for a fair, transparent legal system.
The benefits of Britain’s open and fair legal system should only be available to companies that publish the names of their owners in the new public registry.
Some companies will want to continue to hide the names of their owners. But then they’ll have to rely on other people’s institutions to enforce their contracts.
If you want to benefit from an open society, you have to be part of it.