Mr. Chairman and members of the committee, thank you for inviting me back to speak to you today. My name is James Cohen, and I am the executive director of Transparency International Canada. TI Canada is a registered charity and is the Canadian chapter of Transparency International, the world's leading anti-corruption movement.
The release of the Panama papers in 2016 was an explosive look into how the world's secrecy jurisdictions and an army of enablers hide illicit funds from crimes like tax evasion, corruption and fraud. One revelation that came out of the trove of leaked documents is that Canada was being happily marketed as a secrecy jurisdiction by Mossack Fonseca, the firm at the heart of the Panama Papers.
The Toronto Star and CBC journalists found that Mossack Fonseca was marketing Canada to clients as a desirable place to store dirty cash, based on our generally positive reputation but also, importantly, on our weak disclosure laws and enforcement. The correspondences the media published showing this advice were from 2012. TI Canada is currently re-examining this phenomenon of overseas incorporation agencies marketing Canada's opacity, and we are finding that nothing has changed. The term that came out of the Panama papers for money laundering and tax dodging in Canada, “snow washing”, is alive and well.
However, as of April 19, Canada is in a better position. TI Canada and our civil society partners enthusiastically applaud the government's proposal to establish a publicly accessible registry of beneficial ownership in the 2021 budget. Canada has been slammed by international organizations, civil society and peers for years, and now we have taken a large step out of that shadow.
Of course, the federal government cannot establish corporate beneficial ownership transparency on its own and expect the problem to be resolved. The provinces and territories must come on board with this initiative. Thankfully there is already momentum, as we see Quebec on the cusp of making corporate beneficial ownership information public via Bill 78, and the British Columbia Land Ownership Transparency Registry went online last week. We hope this will be followed by a public corporate beneficial ownership registry too.
The world is shrinking as a place for tax dodgers, kleptocrats and fraudsters to hide. In 2016 the United Kingdom was the first country to have a public beneficial ownership registry. The U.K.'s overseas territories and Crown dependencies, which include some of the best-known secrecy jurisdictions, such as the Isle of Man, have also agreed to establish publicly accessible registries of beneficial ownership. In a joint statement, the crown dependencies cited their need to co-operate by 2023 with European Union anti-money laundering directive 5, which requires all EU members to establish a public beneficial ownership registry.
From this trend we see that after years of being regarded as a laggard, Canada has the chance to move up to the head of the class on beneficial ownership transparency. While I would never say that any tool is a silver bullet for solving tax evasion and money laundering, a publicly accessible registry will be a powerful tool. It needs to be set up correctly, though. We can learn a lot from our peers in the U.K. and the EU and make sure that our registry has verified data and harsh consequences for those trying to falsify information. Canada's registrar should also have a staff that can conduct proactive investigations and a tip line for people to provide information on suspected tax evaders so proper investigations can be conducted.
This will be a big year for international forums to address beneficial ownership transparency, corruption, money laundering and tax evasion. There will be the G7 hosted by the U.K., the UN General Assembly special session on corruption, the open government partnership summit in South Korea and eventually the Summit of Democracies hosted by U.S. President Biden. This year the Financial Action Task Force, the global standard-setting body on anti-money laundering, will also review recommendations on beneficial ownership transparency, possibly making public registries a new standard. Canada now has a foot to stand on in these forums for calling for greater transparency from others to continue to close the space for tax evaders, kleptocrats and crooks to hide in.
Thank you, and I am happy to take any questions from the committee.