What three characteristics unite luxury London property linked to the daughter of a former Uzbek President, the secret payment of money intended for state coffers in the Congo to a controversial Israeli billionaire, and a multi-billion dollar fund that siphoned money out of Malaysia’s treasury and into blockbuster films, Picassos, and super-yachts?
First, they all look like corruption. In each case money was moved through various vehicles in an attempt to make it difficult to trace. Second, they all involve the use of anonymous companies, which can be registered and run with no record of the real individuals benefitting from their activity. And third, they all opted to benefit from the secretive company formation regimes in the British Overseas Territories.
The Overseas Territories include some of the world’s most significant tax havens’, which have long been a go to destination for the criminal and corrupt. The Cayman Islands, the British Virgin Islands and Bermuda are hotbeds for those looking to stash ill-gotten gains and then launder their money until it can be spent on apparently legitimate investments – penthouse pads, diamonds, stocks and shares. And these island jurisdictions are all, ultimately, the UK government’s responsibility.
Key to this is the ease with which it is possible to set up a company that appears not to be linked to you. A quick Google search will bring you to a wealth of companies offering to quickly and easily set up companies in these British tax havens, whilst hiding your identity. For those with large amounts of money gained through drugs, people trafficking or bribery this is like striking gold twice. Anonymous company after anonymous company can be set up, creating a complex web of ownership stretching across the Overseas Territories and beyond, cloaking business dealings spread around the world.
There are hundreds of thousands of these secret companies registered in UK tax havens, many of which are not vehicles for crime or corruption and have nothing to fear from greater transparency. However, in my decades of working as a campaigner tackling financial crime, I know enough of them are being used for unethical or illegal activity to know this is an issue we have to confront. We need better corporate accountability across UK tax havens and new rules to ensure hiding your identity is only an option in exceptional circumstances where legitimate security reasons can be proved.
In 2016, in the wake of the publication of the Panama Papers revelations, which starkly demonstrated the extent to which UK Overseas Territories were being used to avoid tax and hide money, David Cameron pledged to take action at the global anti-corruption summit. But in the intervening two years, a referendum, a change in Prime Minister, a snap election and the ongoing negotiations with the EU have seen progress stall and ambitions diminish.
Now is the time to put this issue back on the table. In just over a year we will be leaving the EU. Yet amongst the column inches, speeches, and political interviews given over to the details of the deal we are looking to achieve, very little has been said about the Britain we want to be. We want to be the country of choice for the entrepreneurial, the savvy investor and the creative innovator. And we want to lead the world in being the best, cleanest and most fair place to do business. But how can we do that when the territories in our own backyard continue to offer a safe haven to the dodgy dictator stealing from his own people, the criminal gang trading in violence and human misery, and those selling weapons to armed groups killing and maiming innocent men, women and children?
Today MPs from all political parties will attempt to bring in a new law establishing public registers of beneficial ownership of companies in the Overseas Territories. It may not sound that grand or even that interesting, but it would mean that it would no longer be possible to hide the identities of those behind these offshore companies, making it far harder to use them to hide dirty money. And it would really aid law enforcement agencies around the world fighting corruption and bringing criminals to justice.
This is not the first time this has been floated. It was debated a year ago, but no substantive action was taken as a result. Since then, UK tax havens have been at the heart of at least seven major corruption scandals detailed in new analysis published by Global Witness today.
Today we can start afresh. But we need the government to get behind us. For Britain to be a country that stands tall in the world, that represents values we have pride in and that offers a fair chance to those who play by the rules, we need to finally challenge some of the corrupt behaviour taking place in our Overseas Territories. We have the chance to become a beacon for transparency and once more lead the world in fighting the scourge of corruption – now is the time to seize it.