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Tuesday 20 August 2019
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AG sets fire under execs

Bills target corrupt entities

Attorney General Faris Al Rawi Photo by Sureash Cholai
Attorney General Faris Al Rawi Photo by Sureash Cholai

A group of firemen at a firemen's conference who don't want to talk about water.

That’s how Attorney General Faris Al-Rawi summed up a workshop last week called, Lifting the veil on secret company ownership, as he “respectfully” raked energy executives across the coals for skirting some of the most prevalent concerns in the industry, including transfer pricing and explaining the wealth of businesses within their groups for fear of exposing corrupt entities among their own.

The workshop, part of the final day of the 2019 TT Energy Conference, examined the Beneficial Ownership Transparency Bill and how the energy industry could benefit from having a registry of the beneficial owners of all the nation's businesses.

“This law on beneficial ownership has some sisters and brothers alongside it. It is here and it is coming – but it has not made it to the Parliament yet because certain professionals in TT are afraid to be caught by the law. Certain professionals in this country don’t want to have the obligation to ask their clients who roll up with a bag of cash to pay them, whether the money is something that can be explained. Does that sound like TT?”

Al-Rawi put it to the workshop that while the conversation about other bills developed by Government is one that needs to be ventilated, several people would not want many of the bills passed. He pointed to corrupt businesspeople as the reason. He took aim at the conference’s host, Energy Chamber CEO Thackwray Driver and TT Extractive Industries Transparency Institute (TTEITI) chairman Victor Hart, challenging them to be just as fervent in advocating these bills as their other causes, regardless of the possible backlash.

“I would love to throw out a challenge to the Energy Chamber and Dr Driver in particular,” said Al-Rawi while touching on the issue of transfer pricing, “I would like to hear your voice on this issue most respectfully. I accept that the majority of your members are the very people you would have to investigate.”

Al-Rawi said the bill would ensure law enforcement agencies have accurate and up-to-date information on the natural/beneficial owners of all businesses.

“If we think that in the energy industry disclosure of the beneficial ownership would be a big deal, it won’t. There are sophisticated entities who are multi-nationals operating in TT who are compliant with laws elsewhere for beneficial ownership. That is why the UK register had over two million hits on it. I don’t need the TT beneficial ownership registry for energy, I could go to the UK and check out the shareholders right there,” Al-Rawi continued.

Passing the bill was “common sense,” Al-Rawi said, and advocated the bill as part of a national, and worldwide, drive to combat the scourge of fraud and financial crimes in the business and energy community.

“Tax evasion is going down and the Financial Intelligence Unit (FIU) is picking it up. But if the energy extracting industry is to be meaningful as to what is beneficial to TT, beneficial ownership is really a very small aspect of the discussion. Transfer pricing is the bogey.”

Transfer pricing is the strategy of pricing transactions between businesses under common ownership, and serves to stop the crime of base erosion and profit shifting, which is the act of moving profits from businesses in one tax bracket to a lower tax bracket – which is, in layman’s terms, a sophisticated form of tax evasion.

Al-Rawi compared the discussion of the bill amid the greater issues in tax evasion and financial crimes to “firemen at a fireman’s conference, who refuse to talk about water” – an analogy he commandeered from EU Ambassador Arend Biesebroek, who spoke at the workshop moments before.

The AG placed the bill in the context of other legislation, like the Civil Asset Forfeiture Explaining Wealth Bill (Explain Your Wealth Bill), the Transfer Pricing Bill, and the Registration of Deeds Bill ­– all of which are waiting to be debated in Parliament­ – which need just as much advocacy, if not more, because they will have a greater effect on the financial crimes committed here.

Al-Rawi went on to the Explain Your Wealth Bill, which he said would not be limited to politically exposed people (PEPs).

“We have a law that treats with PEPs,” he said, “But is the guy in the licensing company running a $200 certified copy racket explaining his wealth? Do the math – 10,000 cars per month times $200-$500 a car. That is $60 million a year in racket. That is the smallest example I could give you. Explain your wealth legislation ought to fall in the fertile ground of my colleagues in front of me. I ask you (Hart) to take up that course in your public advocacy for beneficial ownership. You are not talking about water in the fireman’s conference.”

Passing the Beneficial Ownership Transparency Bill, in particular, Al-Rawi pointed out, would serve to meet international obligations, but added that the bill is sensible and would do its part in battling fraud in the energy sector.

“I ask you to remember the $1 billion (in cocaine) found in juice cans in the US and shipped from Trinidad was done by a defunct company on the TT register. Some fraudster used that corporate vehicle to conduct that transaction.

“(Having this bill) is not from external pressure, it is common sense for TT. Al Capone did not go down for murder, Al Capone went down for tax evasion,” Al-Rawi said.

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