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| British Virgin Islands accused of ‘shameful’ attempt to avoid financial crime crackdown | British Virgin Islands accused of ‘shameful’ attempt to avoid financial crime crackdown |
| (32 minutes later) | |
| MPs write to premier over BVI proposals for new register of who owns firms registered on islands | MPs write to premier over BVI proposals for new register of who owns firms registered on islands |
| The British Virgin Islands (BVI) have been accused of a “shameful” attempt to avoid a crackdown on financial crime, in a growing rift with the government that threatens to escalate into a constitutional standoff. | The British Virgin Islands (BVI) have been accused of a “shameful” attempt to avoid a crackdown on financial crime, in a growing rift with the government that threatens to escalate into a constitutional standoff. |
| MPs have written to the premier of the BVI, while the former development minister Andrew Mitchell fired a broadside at the islands’ leadership, over their proposals for a new register of who owns companies registered on the islands. | MPs have written to the premier of the BVI, while the former development minister Andrew Mitchell fired a broadside at the islands’ leadership, over their proposals for a new register of who owns companies registered on the islands. |
| The government is also understood to be unhappy with the draft policy measures put forward by the tax haven, one of 13 overseas territories that enjoy varying degrees of self-governance. The dispute comes with the foreign secretary, David Lammy, leading attempts to shed the UK’s reputation as a hub for “dirty money”. | The government is also understood to be unhappy with the draft policy measures put forward by the tax haven, one of 13 overseas territories that enjoy varying degrees of self-governance. The dispute comes with the foreign secretary, David Lammy, leading attempts to shed the UK’s reputation as a hub for “dirty money”. |
| The BVI do not currently publish details of who owns companies incorporated there, a practice that campaigners say makes the British overseas territory a magnet for financial crime, including money laundering and tax evasion. | The BVI do not currently publish details of who owns companies incorporated there, a practice that campaigners say makes the British overseas territory a magnet for financial crime, including money laundering and tax evasion. |
| Companies based on the islands have appeared in multiple international investigations into alleged wrongdoing, including last month’s revelations by the Guardian and media partners about alleged tax evasion by the Russian oligarch and former Chelsea FC owner Roman Abramovich. | Companies based on the islands have appeared in multiple international investigations into alleged wrongdoing, including last month’s revelations by the Guardian and media partners about alleged tax evasion by the Russian oligarch and former Chelsea FC owner Roman Abramovich. |
| Overseas territories have pledged to introduce publicly accessible registers of beneficial ownership (PARBOs), as have crown dependencies such as Jersey, Guernsey and the Isle of Man. | Overseas territories have pledged to introduce publicly accessible registers of beneficial ownership (PARBOs), as have crown dependencies such as Jersey, Guernsey and the Isle of Man. |
| However, last month, amid concern about delays and resistance, the BVI published proposals that have met with fury from MPs and civil society groups, who say the system would make it virtually impossible to find out who owns their companies. | However, last month, amid concern about delays and resistance, the BVI published proposals that have met with fury from MPs and civil society groups, who say the system would make it virtually impossible to find out who owns their companies. |
| The row threatens to put the UK and the BVI on a constitutional collision course, amid calls for the government to issue a rarely used “order in council” to force the BVI to comply. | |
| The BVI proposals are part of a consultation process about granting access to corporate ownership data to people deemed to have a “legitimate interest” in the information, such as law enforcement agencies, businesses, journalists and civil society groups. | The BVI proposals are part of a consultation process about granting access to corporate ownership data to people deemed to have a “legitimate interest” in the information, such as law enforcement agencies, businesses, journalists and civil society groups. |
| However, under the draft policy, applicants could only get hold of company ownership information if they are involved in regulatory or legal proceedings about financial crime, or a criminal case where a court determines the data could help solve the investigation. | However, under the draft policy, applicants could only get hold of company ownership information if they are involved in regulatory or legal proceedings about financial crime, or a criminal case where a court determines the data could help solve the investigation. |
| The owner of the company would be tipped off about any such request and would have five days to object to the information being shared. | The owner of the company would be tipped off about any such request and would have five days to object to the information being shared. |
| In a letter to the premier of the BVI, Natalio Wheatley, MPs said this could “expose journalists to legal or physical intimidation when investigating high-risk stories on drug cartels, kleptocrats, or human traffickers”. | In a letter to the premier of the BVI, Natalio Wheatley, MPs said this could “expose journalists to legal or physical intimidation when investigating high-risk stories on drug cartels, kleptocrats, or human traffickers”. |
| It would also serve as an early warning system for “bad actors”, allowing them to liquidate assets before an investigation, wrote Joe Powell MP and Mitchell, who jointly chair the all-party parliamentary group (APPG) on anti-corruption and responsible tax. | It would also serve as an early warning system for “bad actors”, allowing them to liquidate assets before an investigation, wrote Joe Powell MP and Mitchell, who jointly chair the all-party parliamentary group (APPG) on anti-corruption and responsible tax. |
| They also criticised the “logical impossibility” of a proposal under which applicants would have to know the identity of a company’s owner in order to request information about who owns it. | They also criticised the “logical impossibility” of a proposal under which applicants would have to know the identity of a company’s owner in order to request information about who owns it. |
| The BVI plans also include a narrow definition of what constitutes ownership, while access to the information would come with restrictions on how it could be used, including potential financial penalties and legal action for publishing it. | The BVI plans also include a narrow definition of what constitutes ownership, while access to the information would come with restrictions on how it could be used, including potential financial penalties and legal action for publishing it. |
| Mitchell and Powell urged the BVI to reconsider their approach. | Mitchell and Powell urged the BVI to reconsider their approach. |
| Mitchell, a former development minister and deputy foreign secretary, said the BVI proposals showed “total contempt for the British parliament’s declared insistence that open registers of beneficial ownership be implemented throughout our overseas territories. | |
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| “Furthermore having led officials at the Foreign Office to believe they needed more time to implement open registers, we now see their intentions were very different. | “Furthermore having led officials at the Foreign Office to believe they needed more time to implement open registers, we now see their intentions were very different. |
| “This is nothing other than a shameful bid to continue to manage stolen funds and assist in money laundering from sources close to the sex trade and the drugs trade. | “This is nothing other than a shameful bid to continue to manage stolen funds and assist in money laundering from sources close to the sex trade and the drugs trade. |
| “If the BVI wish to travel under the British rule of law, under our flag and under our monarch, they must also accept our values.” | “If the BVI wish to travel under the British rule of law, under our flag and under our monarch, they must also accept our values.” |
| The Foreign Office is understood to be unhappy with the BVI proposals and hopes to persuade the territory’s government to improve them significantly. Officials made the UK’s position clear during a summit with the overseas territories in November last year. | The Foreign Office is understood to be unhappy with the BVI proposals and hopes to persuade the territory’s government to improve them significantly. Officials made the UK’s position clear during a summit with the overseas territories in November last year. |
| Mitchell echoed calls previously issued by the government’s anti-corruption champion, Dame Margaret Hodge, for ministers to issue an “order in council” forcing the BVI to comply. | Mitchell echoed calls previously issued by the government’s anti-corruption champion, Dame Margaret Hodge, for ministers to issue an “order in council” forcing the BVI to comply. |
| The tool is used very rarely, in order to respect the self-governance of the overseas territories. It has previously been used to abolish the death penalty and decriminalise homosexuality in overseas territories. | The tool is used very rarely, in order to respect the self-governance of the overseas territories. It has previously been used to abolish the death penalty and decriminalise homosexuality in overseas territories. |
| A Foreign Office spokesperson said: “This government has made tackling illicit finance in the UK, as well as in our overseas territories and crown dependencies a priority since day one. As the foreign secretary has said, he is taking up the issue of public registers of beneficial ownership with full vigour.” | A Foreign Office spokesperson said: “This government has made tackling illicit finance in the UK, as well as in our overseas territories and crown dependencies a priority since day one. As the foreign secretary has said, he is taking up the issue of public registers of beneficial ownership with full vigour.” |
| The campaign group Transparency International has also expressed grave concerns. | The campaign group Transparency International has also expressed grave concerns. |
| MPs are due to discuss the progress of PARBOs during a Westminster Hall debate on Wednesday, amid growing concern about proposals by the BVIs and other overseas territories. | MPs are due to discuss the progress of PARBOs during a Westminster Hall debate on Wednesday, amid growing concern about proposals by the BVIs and other overseas territories. |
| The government of the BVI declined to comment. In a previous press release, it expressed a commitment to transparency and tackling financial crime. It added that the formulation of open registers required a “tailored approach” depending on the jurisdiction. | The government of the BVI declined to comment. In a previous press release, it expressed a commitment to transparency and tackling financial crime. It added that the formulation of open registers required a “tailored approach” depending on the jurisdiction. |
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