UK orders overseas territories to publish registers in tax evasion crackdown
British Overseas Territories will have to reveal the identities of people who place money in companies within their borders, under a UK Parliament legislative amendment designed to crack down on tax evasion.
Theresa May’s minority government agreed to the amendment in a dramatic, last-minute U-turn on Tuesday, following a back-bench rebellion by 19 Conservative MPs. It had earlier been resisting the move as unwarranted interference in the territories’ affairs.
Britain’s 14 overseas territories include tax havens such as the British Virgin Islands, the Cayman Islands and Bermuda. More than half the companies revealed by the leak of the ‘Panama Papers’ in 2015 are incorporated in the British Virgin Islands.
Parliamentary campaigners
The amendment, which was put forward by Labour MP Dame Margaret Hodge and former Conservative chief whip Andrew Mitchell, aims to stop tax havens being used to conceal ‘dirty money’ derived from corrupt businesses and criminal activity.
The amendment was backed by all opposition parties and Mitchell, a former international development secretary in David Cameron’s 2010-16 governments, reportedly won support for it from at least six former cabinet ministers.
Faced with a likely defeat, Foreign Office minister Sir Alan Duncan told the House of Commons that the government did not want to “legislate directly” for the overseas territories or risk damaging long-standing constitutional arrangements that respected their autonomy.
“However, we have listened to the strength of feeling in this House on this issue and accept that it is, without doubt, the majority view of this House that the overseas territories should have public registers ahead of it becoming an international standard as set by the Financial Actions Taskforce,” he said. “We will accordingly respect the will of the House and will not vote against the new clause six.”
Publish or be damned
Labour MP Dame Margaret Hodge, said the move was “a remarkable … world-changing measure” (Image courtesy: National Archives).
The amendment to the Sanctions and Anti-Money Laundering Bill effectively requires the overseas territories to publish registers of the ‘beneficial ownership’ of companies within their jurisdictions before 31 December 2020.
If any territories fail to publish such a register, the UK government will be obliged under the legislation to prepare a statutory instrument by the end of 2020 ordering them to do so.
The amendment does not apply to the crown dependencies of Jersey, Guernsey and the Isle of Man, ostensibly because it could only be extended to them via a separate legislative instrument.
Dame Margaret, who chaired parliament’s powerful Public Accounts Committee from 2010 to 2015, said the move is “a remarkable, important and really world-changing measure in relation to the fight against corruption”.
Anti-corruption advocacy group Global Witness hailed it as “a huge win”. But Lorna Smith, interim executive director of British Virgin Islands Finance, which represents the territory’s financial services industry, accused supporters of the legislation of “colonialism” in an interview with the BBC.
About Liz Heron
Liz Heron is a journalist based in London. She worked on daily newspapers for more than 16 years as an education correspondent, section editor and general news reporter. She was Education Editor of the South China Morning Post in Hong Kong and has contributed to a wide range of British media including The Independent, The Guardian and the BBC.
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