CRIMINAL CAPITALI$M

UK to remain global centre of ‘dirty money’ without offshore registers, MPs say

Rob Davies
Thu, 7 December 2023 

Photograph: Javier Fergo

Britain will remain the global centre of “dirty money” unless ministers revive stalled plans for public registers of who owns companies based in offshore havens such as the British Virgin Islands (BVIs) and Jersey, campaigners and senior MPs have said.

The veteran anti-corruption campaigner Dame Margaret Hodge MP said it was a matter of national security to do away with the secrecy offered by the 10 inhabited overseas territories and three crown dependencies.

In 2020, the government gave the overseas territories, which include the BVIs, Cayman Islands and Bermuda, a deadline of December 2023 to introduce public registers of corporate ownership. Only Gibraltar has done so.


Hodge called on the government to issue an “order in council” to compel them to comply and also suggested the crown dependencies could be forced to follow suit, a proposal that would test longstanding constitutional convention and law.

Jersey, Guernsey and the Isle of Man had acted dishonourably by reneging on their own promise to introduce public registers, she said. Jersey said it exchanged information with authorities around the world “which it considers the most effective approach in the global fight against financial crime”.

But Hodge, who chairs a cross-party group of MPs examining corruption and tax, said that an “epidemic of tax avoidance, tax evasion and economic crime flourishes in an environment of secrecy”.

“If we are serious about trying to eliminate dirty money from Britain, we must have public registers so that we can … follow the money,” she said.

She cited the role of UK-linked tax havens in investigations published by the Guardian and international partners, including the Pandora Papers, Paradise Papers, and the Cyprus Confidential leaks that were published last month.

The Foreign Office minister David Rutley said the government was discussing an interim measure that would see offshore havens allow people with a “legitimate interest” to access records from next year, in line with the position across most of the EU. Those likely to be regarded as having a legitimate right to access records include the media and campaign groups.

He also promised to pursue fully public registers.

“The train is leaving the station, we know the direction of our travel,” he said.

UK-linked offshore havens deprived 79 countries of £250bn – equivalent to more than 20 years of the UK’s foreign aid budget, during the three decades leading up to 2018, according to the anti-corruption campaign group Transparency International.

The government appears to have accepted the need to crack down, but ministers could find themselves on a collision course with offshore centres because of the arcane nature of the UK’s constitutional relationships.

The government can order overseas territories to adopt public registers but Britain has typically not sought to exert control on crown dependencies, which are possessions of the crown rather than part of the UK.

The three dependencies tentatively committed to setting up public registers in 2019, once the European Union had reviewed its own plans.

The European court of justice ruled late last year that unrestricted public access to such information was a disproportionate infringement on individuals’ privacy.

The dependencies paused their plans in light of the ruling and have said they are taking legal advice.

In a written answer to a question posed by Hodge, the junior home office minister Tom Tugendhat said the court’s ruling should have no effect.

He said the government was “satisfied with the lawfulness of our own publicly accessible registers and continues to believe that [they] could legally implement public registers of their own”.

Britain threw its weight behind public registers in 2014 when the then prime minister David Cameron urged the crown dependencies and overseas territories to follow the UK’s example by publishing corporate ownership data.

MPs including Hodge and Labour’s Meg Hillier said Cameron’s recent appointment as foreign secretary presented an opportunity to apply renewed pressure.