Group worked frantically before 2013 G8 summit to thwart regulatory overhaul, and believed it had influenced David Cameron

This article is more than 2 years old

This article is more than 2 years old

A lobby group representing offshore businesses spoke of having “superb penetration” at the highest levels of the British government before a G8 summit that was expected to bring more transparency into the sector.



The International Financial Centres Forum worked frantically behind the scenes to thwart a regulatory overhaul that would have introduced new obligations for Britain’s overseas territories and crown dependencies.

Appleby, the law firm at the centre of the Paradise Papers leak and a member of the IFC, helped coordinate the pushback, which involved meetings with ministers, senior civil servants, Conservative MPs and lords.

In the end, the measures agreed at the G8 summit in June 2013 were far less radical than originally proposed – a climbdown the IFC was privately happy to share credit for.

There was nothing illegal about the IFC’s lobbying effort. Meetings of this kind involving ministers and civil servants are not unusual. But the Paradise Papers offer rare insights into how the industry worked behind the scenes to press for reforms to be watered down at a time when regulators were privately criticising Appleby for failing to adhere to existing regulations designed to thwart money laundering and terrorist financing.

One argument put forward by the IFC was that increased transparency would expose offshore territories to “endless media stories” by investigative journalists, as well as unwelcome scrutiny by tax campaigners and NGOs.

Appleby was a founding partner of the IFC, set up in 2009 to “counter dated stereotypes and inaccurate assumptions” about the offshore sector. In 2013, the annual membership fee was $30,000.

The group swung into action before the G8 summit, which was to be chaired by the then British prime minister David Cameron. Reacting to concerns about corruption and anger over aggressive tax avoidance and evasion, Downing Street was pushing for much greater transparency in the offshore sector.

Cameron had wanted the summit, held on the shore of Lough Erne in County Fermanagh, Northern Ireland, to be a watershed for tax havens. They were being pushed to agree to cross-border sharing of information on their clients’ income and dividends.

They were also being urged to set up centralised registers for corporate ownership that would name the beneficial owners of companies. These registers were supposed to be open to members of the public as well as regulators. But the IFC was vehemently opposed to this, and to the idea of collecting and sharing information about the wealth of clients.

Facebook Twitter Pinterest G8 and EU leaders at the summit in Northern Ireland in June 2013. Photograph: Jewel Samad/AFP/Getty Images

In the weeks leading up to the G8, the IFC beavered behind the scenes in Whitehall. It was able to secure meetings with David Gauke, then the exchequer secretary to the Treasury, senior officials at HMRC, the permanent secretary at the Department for Business, Innovation and Skills, and two Tory peers, Lord Blencathra and Lord Flight.

On 9 June 2013, a week before the G8, the IFC secured an 80-minute meeting with Dominic Martin, a senior official in the Cabinet Office who was then director of the UK’s G8 presidency unit. The access appears to have been organised by the London-based PR and lobbying consultants Lansons.

In a memo sent afterwards, IFC members were told the group’s concerns had been “passed to UK experts preparing Cameron”, who was in the US rallying support for the transparency measures.

The memo was critical of the then chancellor George Osborne, who had called on British territories to support the reforms. The IFC said his remarks had been “very unhelpful”. But the meeting with Martin had otherwise gone well, the memo suggested.

The IFC had provided “a full briefing regarding our concerns over a public registry of beneficial ownership … Well done Lansons for orchestrating contact at this very high level.”

Two days before the summit, the IFC said, it secured another “crucial meeting” with the senior Treasury official Shona Riach.

G8 leaders met on 17 June and a day later, in an email to IFC members, Richard Hay, a leading advocate of the group, described how the UK government had backed away from introducing greater transparency.

Facebook Twitter Pinterest David Gauke, who is Theresa May’s work and pensions secretary. Photograph: Mary Turner/Reuters

“UK did not get buy-in for the intrusive and unworkable proposals … evident hubris for those claiming its adoption by G8 was inevitable,” he said. “We are credible and visible in the UK government and secured credible engagement at the highest levels, including a good media profile.

“Our point about possible loss of leverage with the US was repeated by PM Cameron as his reason for not proceeding with public registers, almost certainly stimulated by our representations.”

A month later, on 23 July, IFC partners held a conference call during which the success of the lobbying operation was discussed.

“The forum had superb penetration of UK policymakers in the lead-up to the G8 through cabinet, Treasury, the FCO and HMRC,” an agenda for the call said. “In particular, the forum had a crucial meeting with Shona Riach, director, international, HM Treasury, two days before the G8 summit.”

Lansons was also praised for orchestrating “an effective forum campaign in the run-up to the G8 summit culminating in articles in the Sunday Telegraph, the FT, the Economist and the Sunday Times”.

While the lobbying effort was left to the IFC, Appleby partners were also agitated about the idea of more transparency.

An internal memo shared with them said: “The initial and ongoing costs may be extreme and the repercussions of data collected (or made public) could well be a boon for criminals, particularly those involved in cybercrime and data mining for illegal purposes.”

The potential expense to the firm was reinforced on 13 June, when partners were told the “initial and ongoing costs will be eye-watering”.

The following year, with reforms once again being mooted, Appleby asked its partners to contribute reasons for pushing back against more transparency.

It suggested “incidences of kidnapping, extortion or blackmail in G8 countries that were motivated by access to publically available data about an individual” would be useful to make the argument.

The IFC said it would not comment on meetings.

Play Video 2:07 What are the Paradise Papers? – video

However, a spokesman said: “IFC Forum is an industry group representing the views of professional services firms operating in international finance centres (IFCs). It was established in 2009 because no existing industry body represented the views of this sector.

“The forum’s goal is to balance policymaker debate and, together with NGOs, major companies, governments and other industry bodies, ensure that UK government policy in particular is informed by all relevant perspectives.

“The forum believes that IFCs play a key part in cross-border trade. The main beneficiaries are ordinary people receiving enhanced pension returns, cheaper insurance and the jobs created in growing economies. Much of our work is in the public domain.”

Riach confirmed her meeting with the IFC. A Treasury spokesman said: “The UK G8 presidency spearheaded new measures on transparency and we became the first G20 country with a public register showing who ultimately owns and controls companies.”

A government spokesman said: “As part of his role as exchequer secretary, David Gauke met with many stakeholders. He helped devise initiatives to address the problem of tax avoidance … This has allowed the Treasury to recover billions of pounds from improper tax avoidance.”