Beneficial Ownership Registers: Overseas Territories and Crown Dependencies

Andy Slaughter Excerpts

Thursday 7th December 2023 Commons Chamber

[Dame Margaret Hodge]

Yes. Sadly, London has become the jurisdiction of choice for too much of our dirty money. The all-party parliamentary group on anti-corruption and responsible tax has been successful—albeit not as much as I would have liked—in achieving changes to economic crime legislation to challenge and start tackling that.

[Andy Slaughter (Hammersmith) (Lab)]

I congratulate my right hon. Friend on leading the debate, and more particularly on the forensic and persistent way she has dealt with this issue over so many years. It is clear that London is the centre of much of the wrongdoing in this area. That is not a coincidence; it is because the Government have been permissive. Has she had an indication of whether they are now prepared to back her proposals?

[Dame Margaret Hodge]

My hon. Friend is right. I have often said that it is not just this Government who have done that; the Labour Government, in their time, also deregulated to such an extent that they allowed London to become the centre of this activity. I do not feel that the Government are doing all that they can to try to turn that around. I await a future Labour Government, and I will watch Labour Ministers with an eagle eye to ensure that they do that.

The debate is not just about the role of the overseas territories and Crown dependencies in facilitating economic crime; their activities as secrecy jurisdictions are a threat to our national security, as the right hon. Member for New Forest East (Sir Julian Lewis) said. The Foreign Affairs Committee said as much in a report on the matter, and as recently as November it called on the Government to ensure that the overseas territories fulfil their commitment, adding that

“there should be no further deadline extensions.”

We know, for example, that between 2008 and 2018, £68 billion flowed out of Russia and into our overseas territories. We are a favourite jurisdiction for receiving Russian-laundered money. We know that individuals who are sanctioned use the overseas territories and Crown dependencies to hide their assets just before sanctioning to prevent those assets from being frozen. Abramovich and Usmanov are two classic examples of that practice.

We know the role of the overseas territories in preventing us from knowing the actual beneficial owner of property in the UK. Over 70% of the properties in the list of those that we know about are owned by companies registered either in the Crown dependencies or the BVI. We still cannot identify the beneficial owners of two thirds of those 70%, because they use trusts to hide their identity, and 85%—more than eight out of 10—of those trust arrangements are based in the three Crown dependencies and the BVI.

Most recently, in the Cyprus papers, which have just been uncovered, we found a direct link between Vladimir Putin and Roman Abramovich, with money going from Abramovich to two men dubbed as “wallets” for Putin—a man whose salary is $100,000, but whose wealth is rumoured to be between $125 billion and $200 billion. The theft of money from the Russian people is facilitated by secrecy jurisdictions such as Cyprus, but also by our own tax havens.

The problem is massive, and the role of our overseas territories and Crown dependencies is central. Baron Cameron of Chipping Norton understood that when he went to Davos in January 2013—over 10 years ago—and warned multinationals to

“wake up and smell the coffee”.

I will give a few more quotes from him. In 2013, he pledged:

“Every one of the Crown Dependencies and Overseas Territories are going to have an action plan on beneficial ownership”.

He told the overseas territories to rip aside the “cloak of secrecy” by creating public registers of beneficial ownership. In 2014, he wrote to the overseas territories, saying that public registers were

“vital to meeting the urgent challenges of illicit finance and tax evasion.”

In September 2015, he accused them of

“frankly…not moving anywhere near fast enough…if we want to break the business model of people stealing money and hiding it in places where it can’t be seen: transparency is the answer.”

When Lord Cameron launched our UK register in 2016, he said that

“it’s better for us all to have an open system which everyone has access to, because the more eyes that look at this information the more accurate it will be.”

At the anti-corruption summit in May 2016, he said:

“We’ve talked about the need for every country to ultimately reach what I call the gold standard of having a public register of beneficial ownership. And I am clear that I include all the Overseas Territories and Crown Dependencies.”

Lord Cameron is now in a position to act, and I urge the Minister to tell his boss to do so. When even Nigeria, Ukraine, Albania and Morocco have introduced public registers, why can our tax havens not?

Using the European Court of Justice ruling to delay the implementation of public registers is a convenient but lame excuse. It actually has not deterred Gibraltar. While some countries have closed their registers, others have kept them open. Crown dependencies in particular are acting in a completely dishonourable way. Their role in facilitating economic crime and tax avoidance is indisputable, and their protestations to the contrary are simply untrue. Their behaviour in providing public assurances that they will move towards public registers but claiming that the European court ruling prevents them from doing so is, in my view, unforgivable.