The Organisation for Economic Cooperation and Development’s (OECD) initiative to force jurisdictions with less restrictive shipping registries to increase transparency with regard to the beneficial ownership of vessels was the main topic of discussion at a recently-held conference in Panama.
Although the meeting, which was hosted by the Panamanian Maritime Law Association, and co-sponsored by US-based think tank, the Center for Freedom and Prosperity (CFP), also looked at recent developments with regard to the OECD’s ‘Harmful Tax Competition Initiative’, the principal focus was on the multilateral body’s demands on shipping registers.
In a review published by its Maritime Transport Committee in March, the OECD announced that:
‘The study has found that it is very easy, and comparatively cheap, to establish a complex web of corporate entities to provide very effective cover to the identities of beneficial owners who do not want to be known…The most common and effective mechanisms that can provide anonymity for beneficial owners include bearer shares, nominee shareholders, nominee directors, the use of intermediaries to act on owners’ behalf and the failure of jurisdictions to provide for effective reporting requirements,’ continuing:
‘Open registers, which by definition do not have any nationality requirements, are the easiest jurisdictions in which to register vessels that are covered by complex legal and corporate arrangements. The arrangements will almost certainly cover a number of international jurisdictions which would be much more difficult to untangle.’
According to a report from The Panama News, Jill Keohane, in-house counsel for the Liberian International Ship and Corporate Registry told those attending the July 15 conference that she had come to visit shipping rival, Panama, in order to bring the ‘ill-conceived campaign of the OECD’ into the light of day.
She went on to explain that the position adopted by Greece and the United States regarding shipping registers – namely that knowledge of the entity or individual controlling the ship is more important than knowledge of its beneficial owner – is the correct one, in the view of the Liberian authorities.
Speaking about the OECD Maritime Transport Committee’s campaign to put pressure on jurisdictions such as Liberia, Panama, and the Bahamas over their low-cost shipping registers, she observed that: ‘It isn’t really about making shipping more secure.’
By Mike Godfrey, for LawAndTax-News.com
