The UK just made it harder for the corrupt to hide their wealth offshore

The UK just made it harder for the corrupt to hide their wealth offshore

From the  scandal  to the Panama and Paradise Papers, time and again we’ve seen how offshore territories - often known as secrecy jurisdictions or tax havens - play a key role in facilitating the illicit flow of money across borders.

Some of the most notorious of these are among Britain’s Overseas Territories.

In fact, if counted together, the United Kingdom and its Overseas Territories and Crown dependencies would top the , given the staggering scale of their undisclosed financial activities.

But, fortunately, this could soon change.

On 1 May 2018, the  of requiring any British Overseas Territory that has not already done so to introduce public registers that reveal the individuals behind companies based there by the end of 2020.

This is a major victory in the fight against cross-border corruption.

Why does it matter?

In 2015, research by Transparency International UK (TI-UK) found that shell companies registered in secrecy jurisdictions were involved in more than three quarters of corruption cases involving property that were investigated by London’s Metropolitan Police. Of these companies, nearly 80 per cent were registered in the UK’s Overseas Territories, like Bermuda, the Cayman Islands and the British Virgin Islands, or in Crown dependencies, like the Isle of Man or Channel Islands.  

Last year, TI-UK identified £4.4 billion worth of property in the UK bought with suspicious wealth. Of the companies used for these transactions, nearly half are based in the British Virgin Islands.

And just last week, a  conducted together with TI-UK and the Organized Crime and Corruption Reporting Project (OCCRP) published details of a Ukrainian crime gang that purchased eight luxury properties in London using companies registered in the British Virgin Islands.

More progress needed

Even while celebrating this week’s ruling in the UK, it is important to note that the Crown dependencies are not yet affected.

More widely, our report published in April looked into precisely this problem of opaque beneficial ownership systems, focusing on how far G20 countries in particular have gone in removing the anonymity that allows criminals and the corrupt to hide their identity behind shell companies. The world’s leading economies still have a lot of work to do to live up to their own principles. None apart from the UK have public registries of beneficial ownership for companies operating within their borders.

The UK’s tough new stance on offshore financial secrecy should inspire others to follow suit

Image: Creative Commons, Unsplash, Anders Wideskott  

For any press enquiries please contact [email protected]

Solicitude

Support Transparency International

Risky business: Europe’s golden visa programmes

Are EU Member States accepting too much risk in their investor migration schemes?

Future Against Corruption Award 2018

TI is calling on young people across the globe to join the anti-corruption movement. People between the age of 18 and 35 are invited to submit a short video clip presenting their idea on new ways to fight corruption. Three finalists will be invited to Berlin during the International Anti-Corruption Day festivities to be awarded with the Future Against Corruption Award. Apply today!

The Azerbaijani Laundromat one year on: has justice been served?

In September last year, a massive leak of bank records from 2012 to 2014 showed that the ruling elite of Azerbaijan ran a $3 billion slush fund and an international money laundering scheme. One year on, has enough been done to hold those involved to account?

Right to information: knowledge is power

The right to information is vital for preventing corruption. When citizens can access key facts and data from governments, it is more difficult to hide abuses of power and other illegal activities - governments can be held accountable.

Paradise lost among Maldives dodgy land deals

Should tourists run for cover as a storm of corruption allegations sweeps across the Maldives?

Foreign bribery rages unchecked in over half of global trade

There are many losers and few winners when companies bribe foreign public officials to win lucrative overseas contracts. In prioritising profits over principles, governments in most major exporting countries fail to prosecute companies flouting laws criminalising foreign bribery.

Ensuring that climate funds reach those in need

As climate change creates huge ecological and economic damage, more and more money is being given to at-risk countries to help them prevent it and adapt to its effects. But poorly governed climate finance can be diverted into private bank accounts and vanity projects, often leading to damaging effects.

Why rather

Follow us on Why rather