**International Corporate Crime**

A study undertaken by international law firm Stikeman Elliott on behalf of the International Tax and Investment Organisation (ITIO) and the Society of Trust and Estate Practitioners (STEP), says that the OECD is excusing large OECD corporate domiciles such as Delaware and Nevada in the USA from compliance with new rules to regulate service providers and track beneficial ownership. This, it claims, while arguing for tighter regulation of “corporate vehicles” in small countries. The study purports to have been the first-ever, comprehensive review of the regulation of corporations, trusts and limited partnerships in 15 OECD and non-OECD countries. (see pdf link below)

A report on the study was launched this week in London, on the eve of a Commonwealth Finance Ministers meeting, by the Rt. Hon. Owen Arthur, Prime Minister of Barbados, an ITIO member country. Prime Minister Arthur said, *”This report is a constructive contribution to the debate on how states should interact on international economic matters. OECD members should recognise that the problem of international corporate crime needs to be addressed in all countries, including themselves.

“As this report shows, times have changed and many small and developing countries are very well regulated. To avoid seeming protectionist in a world where free trade agreements are proliferating, the OECD must insist that all finance centres improve regulation to the same degree and at the same time.”*

Colin Sharp, STEP Worldwide Chairman, added, *”International crime is a global problem which requires global solutions. Our members worldwide find it incomprehensible that they have to bear more onerous and costly obligations than competitors in some US states. Unless corrected this partial approach will only achieve partial results and business will flow from well regulated centres to less stringent ones.”*

The OECD introduced its *Behind the Corporate Veil: Using Corporate Entities for Illicit Purposes* report in November, 2001, calling on governments and regulatory authorities to ensure they were able to obtain information on the beneficial ownership and control of “corporate vehicles” in order to combat their misuse for illicit purposes.

The ITIO/STEP initiative was launched in the belief that the 2001 Report had two major failings: (i) it was prepared without involving countries outside the OECD; and (ii) it focuses on corporate vehicles in non-OECD countries while largely ignoring those in OECD countries which are vulnerable to misuse, such as Delaware limited liability companies.