Thank you for contacting me about tax abuse and public registers of beneficial ownership in the British Overseas Territories.
It is important that our tax system be efficient, and therefore it is right that issues of tax avoidance and evasion be addressed.
Registers of beneficial ownership serve as a crucial tool in promoting transparency and accountability by identifying the ultimate owners of assets, thereby enabling the detection and prevention of illicit activities such as corruption, tax evasion, and money laundering.
The UK has had a public register of beneficial ownership since 2016.
Whilst there are no limits on the UK Parliament’s ability to legislate for the Overseas Territories, in practice there is a constitutional convention that the UK Parliament does not pass legislation which might affect them, without the consent of local governments.
In 2018, the UK Parliament passed ‘The Sanctions and Anti-Money Laundering Act’, which mandated that the UK Government require all Overseas Territories to introduce the register of beneficial ownership and to make these registers publicly available by the end of 2023.
Whilst the 2018 decision by the UK Parliament to pass legislation on the Overseas Territories was criticised by many Territory Governments at the time, the Government reiterated the importance of creating the registers as vital for national security.
However, several Overseas Territories have yet to make their registers of beneficial ownership available to the public.
Given the vital role that the registers will play in preventing those who pose a threat to UK national security from being able to launder their funds through Overseas Territories, in May 2024 I wrote to the Foreign Secretary and asked for a timeline on when beneficial ownership registers for all the Overseas Territories will be made publicly available.
I am pleased that in the response I received, the Minister responsible for the Overseas Territories reiterated the Government’s commitment to tackling tax abuse and financial crime by satisfying the Organisation for Economic Cooperation and Development’s (OECD) regulations on international tax transparency.
The Minister reaffirmed the Government's commitment to remaining a global pioneer in advancing financial transparency, recognising it as a vital instrument in the effort to combat tax evasion and other economic crimes. The Government has further pledged to pursue this goal through the implementation of public registers of beneficial ownership, aiming to establish them as a standard practice worldwide.
The UK Government has been clear with regards to its expectations from the Overseas Territories and the requirement to implement registers of public ownership. To expedite the progress of these vital reforms, the UK is providing technical and financial assistance to Open Ownership. An expert NGO, the organisation is working with multiple Overseas Territories, including the British Virgin Islands and the Cayman Islands, to provide advice on technical systems and data publication.
I welcome the steps taken by the Government to achieve progress and improve financial transparency in the Overseas Territories.