Financial Transparency: Overseas Territories

Joe Powell Excerpts

Wednesday 5th November 2025 Westminster Hall

[Joe Powell (Kensington and Bayswater) (Lab)]

I congratulate my hon. Friend on securing the debate. Does he agree with the National Crime Agency that if it had open and accurate data on who owned and controlled those businesses, its operations would be much more effective? Those businesses are often linked to overseas territories, so the National Crime Agency cannot find their real owners and crack down on them.

[Phil Brickell]

I thank my hon. Friend for his passionate campaigning on this issue. He is absolutely right that we need more transparency to support our law enforcement agencies to tackle this issue, and I will come on to that now.

I pay tribute to the brilliant enforcement work undertaken by the National Crime Agency through its Operation Machinize. Just last week, police visited a number of addresses in my constituency, seizing £17,000-worth of goods in the process. I applaud the work of our enforcement agencies, but as I will explain, these tireless professionals need more support in their work.

Elsewhere, financial murkiness causes friction for British businesses. When I worked in finance, we would often conduct “know your customer” checks and hit a wall, because a trust or a corporate service provider was incorporated in a secrecy jurisdiction. The beneficial owner was always elsewhere. Every time we spoke to law enforcement, journalists or civil society about dirty money, the same names came up: the BVI, the Cayman Islands and Bermuda. It is farcical.

Banks, lawyers and accountants are on the frontline of anti-money laundering checks. Collectively, they spend over £38 billion a year on financial crime prevention—the equivalent of £21,000 every hour. A good-quality public register of beneficial ownership would make their work cheaper, faster and, frankly, more effective, unlocking the growth potential of our world-leading financial services sector.

On national security, since Russia’s barbaric invasion of Ukraine, the UK has quite rightly been at the forefront of the global sanctions regime against Putin. I commend the Minister for his personal leadership in ensuring that it is Putin and his cronies who pay for their unlawful war. The overseas territories have played an important role in enforcing those sanctions, freezing over £7 billion in Russia-linked assets. Indeed, initiatives like the Cayman Islands’ Operation Hektor, which has frozen £6 million of assets, deserve recognition.

Enforcement is only as strong as the weakest link. If opaque corporate structures allow sanctioned individuals to move assets through nominee companies, the whole system is undermined. That is why full beneficial ownership transparency is not a bureaucratic nicety; it is a national security measure. Opponents will say that UK law enforcement agencies have access to this information, but many agencies are critically underfunded and simply do not have the capacity to keep up the bewildering game of whack-a-mole that they play with bad faith actors.

Transparency International UK has identified around £700 million-worth of UK property linked to sanctioned Russian oligarchs that went unflagged in the UK’s register of overseas entities in 2022. Among them is a vast Hampstead estate valued at up to £300 million, reportedly owned by Russian chemicals magnate Andrey Guryev. Reports suggest the property was originally acquired using a company based in—you guessed it—the British Virgin Islands. I asked my friend Yaroslaw Tymchyshyn, chair of the Bolton branch of the Association of Ukrainians in Great Britain how he felt about this. He said:

“The government needs to seize all Russian assets which should be used to fund the Ukrainian war effort. It irks us that the oligarchs are living the high life in the west, whilst the Russians continue to bomb and use drones to kill civilians, including children.”

What should I say to him?

Elsewhere, the Office of Financial Sanctions Implementation has reported that since February 2022 more than a quarter of suspected sanctions breaches have involved intermediary jurisdictions, including the BVI and Guernsey. This level of financial secrecy allows sanctioned elites and hostile actors to hide their wealth, undermining Britain’s sanctions regime and weakening our ability to deter aggression. When dirty money flows unchecked through our financial system, it erodes the credibility of our foreign policy, drives up the cost of energy and food, and ultimately fuels Putin’s brutal war in Ukraine.

In addition, criminal gangs involved in drug smuggling, people trafficking or protection rackets need to launder their ill-gotten gains into the regular economy. The financial secrecy afforded by the overseas territories gives the perfect cover to dodgy accountants, lawyers and corporate service providers. Edin “Tito” Gačanin, a Dutch passport holder but a Bosnia and Herzegovina native, was convicted last year of trafficking drugs from South America into Europe. It has been alleged that Gačanin is connected to the infamous Kinahan cartel, one of Europe’s most notorious organised crime gangs. As reported by the BBC, that cartel has flooded UK streets with drugs and guns over two decades. According to an investigation by The Times, in order to avoid US sanctions, the Kinahans recently sought anonymity using jurisdictions such as the Cayman Islands, the BVI and the Isle of Man.

Even organised fraud finds shelter in the overseas territories. Just last month, the Foreign Secretary rightly announced sanctions on a global scam network led by Cambodian citizen Chen Zhi, who allegedly used BVI companies to launder profits. Those profits were reportedly routed into a £12 million mansion in north London, a £100 million City office block and a string of luxury flats, while victims across the world were left penniless. Even when the authorities do catch fraudsters, financial secrecy in our offshore territories inhibits our ability to hold criminals to account.

Covid fraudster Gerald Smith was prosecuted by the Serious Fraud Office, but tried to use a BVI company to obstruct the seizure of a flat he owned to avoid paying compensation, resulting in a direct loss to the taxpayer. He still owes £82 million—and he is not alone. Just this summer the SFO told the all-party parliamentary group on anti-corruption and responsible tax, which I chair, that 25% of all cases that it is currently investigating have links to the overseas territories.

A final point on national security: I am gravely concerned that secrecy jurisdictions open a back door into our politics. The FinCEN files reveal that in 2016 the husband of Lubov Chernukhin received more than £6 million from Suleiman Kerimov, who was sanctioned in 2022 by the UK for his connections to Putin. Kerimov used a BVI company to conceal that payment. Lubov Chernukhin has donated more than £2 million to the Conservative party since 2012.

I have additional concerns about the Electoral Commission’s capacity to keep up with cryptocurrency donations, which Reform has reportedly already begun accepting. Indeed, the crypto platform Zebec sponsored a panel at Reform’s party conference on “Strengthening the Rule of Law: legislative reform?”. Zebec is, unsurprisingly, ultimately controlled by an entity registered in the British Virgin Islands, as reported by The Observer. Protecting our democracy from foreign interference is made all the more difficult by crypto firms involving themselves in our politics while hiding behind the veil of corporate secrecy, enabled by our overseas territories.

We come on to international leadership. Financial secrecy in jurisdictions under the Union flag does not just damage our economy; it damages our credibility. The UK rightly prides itself on being a global leader in the fight against economic crime. We have made real progress with the Economic Crime (Transparency and Enforcement) Act 2022, the Economic Crime and Corporate Transparency Act 2023 and the register of overseas entities, by boosting the powers of Companies House, and with the Treasury’s recent welcome announcement on reforming our anti-money laundering framework.

Next year, when the UK hosts the countering illicit finance summit, the Government will have a chance to show further leadership, but the UK cannot credibly call on others to improve transparency if the jurisdictions flying our flag lag behind on beneficial ownership. Our diplomats work tirelessly to promote British values overseas—the rule of law, fair competition and integrity in public life—yet, when investigative journalists, non-governmental organisations or foreign Governments look into global corruption cases, the trail often runs through a British overseas territory. That damages us and weakens our hand in international negotiations, giving cover to regimes that would keep their elites’ wealth hidden.

What needs to happen? In 2018, MPs led by the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) and the Government’s anti-corruption champion, Baroness Hodge, successfully secured an amendment to the Sanctions and Anti-Money Laundering Act 2018. I pay tribute to them for their tenacious campaigning over many years. Their amendment required all overseas territories to introduce registers of beneficial ownership by 2020. That deadline slipped to 2023, and then to 2025—another deadline that was largely missed.

The UK’s overseas territories are a valued and integral part of our British family. Their ties to us are deep, and their prosperity is something we rightly cherish. They are our partners in defence, trade and increasingly in tackling the great global challenges of our age: climate change, migration and the rule of law. But being family means being honest, and I am afraid to say that certain jurisdictions have not covered themselves in glory by obfuscating, delaying, ignoring and frustrating the will of this Parliament. It is not acceptable. Missing deadlines sends a “terrible message” to the world, according to the current Deputy Prime Minister, in response to a question I asked him earlier this year when he was before the Foreign Affairs Committee.

This speech is not lazily tarring all overseas territories with the same brush. Far from it: Gibraltar, Montserrat and St Helena have delivered and deserve praise. The Falkland Islands are on track to implement by mid-2026 and are engaging constructively with the UK Government. Bermuda has made positive noises, although there is still room for improvement in its recent statement on next steps under its Beneficial Ownership Act 2025.

Elsewhere progress has been slow and patchy. The British Virgin Islands, in particular, remain a serious concern. Transparency International UK has warned that the British Virgin Islands’ proposed company register framework is not compatible with global transparency standards, with journalists being granted information on only a subset of data, rather than the beneficial ownership that they record, even baking in a tip-off for people being investigated, giving them a chance to object to their information being shared with a journalist. The Cayman Islands have also been slow to move from consultation to implementation. Although some good work has been done, substantial areas remain, including exorbitant costs and an unreasonably high threshold for granting applications from civil society and journalists.

The fact remains that some of the largest financial centres under the British flag are still operating secretive structures that enable tax evasion, sanctions evasion and kleptocracy. Occasionally, capacity restraints are cited. The UK Government rightly have an obligation to step in and provide technical support. There is also a suggestion that some jurisdictions do not want to fulfil their promises, lest they lose their competitive advantage.

To those naysayers, I say that the UK has an obligation to help its overseas territories to diversify their economies. It can be done, as in the case of the Isle of Man, where considerable work is under way to invest in offshore wind. Let me be clear: transparency has not hindered economies elsewhere. The UK has had a fully public register for years, and the sky has not fallen in. Research commissioned by the UK Government estimated that corporate transparency reforms produce data worth up to £3 billion to the public and private sectors. Look at Gibraltar, which has continued to grow, driven by insurance, gaming and fintech, even after introducing full beneficial ownership transparency.

I have a number of asks of the Minister. Last month, the Prime Minister’s anti-corruption champion, Baroness Margaret Hodge, visited the BVI to understand what progress it is making towards fully open registers of beneficial ownership. What update can the Minister give us on that visit? With November’s Joint Ministerial Council rapidly approaching, will he remind those overseas territories that continue to delay the implementation of publicly accessible registers of beneficial ownership, with the maximum possible degree of access and transparency as per last year’s joint communiqué, of their commitment?

Concerningly, the 2024 JMC communiqué contained the following line:

“We note the UK Government’s ambition that Publicly Accessible Registers of Beneficial Ownership (PARBOs) become a global norm and its expectation that Overseas Territories and Crown Dependencies implement full PARBOs.”

Will the Minister confirm that the overseas territories and the Crown dependencies are still expected by His Majesty’s Government to implement fully public corporate registers? If legitimate-interest access filters are an interim step, what assurances can he give me that journalists, civil society organisations and others with a genuine interest will have open and repeated access to company data in the overseas territories? Finally, will the Minister meet me and Yaroslaw from the Bolton branch of the Association of Ukrainians in Great Britain to reassure him that the Government are doing all they can to bring an end to Putin’s barbaric war in Ukraine, including by enforcing economic sanctions in the OTs?

My speech does not seek to undermine the important constitutional relationship between the overseas territories and the UK. I welcome, for example, the £7.5 million recently provided by the UK to Commonwealth member Jamaica after Hurricane Melissa, alongside $1.2 million from the Cayman Islands. But partnership brings mutual obligations, which must include the shared commitment we have all made to openness, integrity and accountability, because every pound laundered through a BVI shell company and every mansion bought with stolen public funds is a stain on our national integrity.

Cleaning up this system is not just an act of international justice; it is a patriotic duty. We cannot build clean foundations for growth while our financial system remains a refuge for dirty money. Public, accessible and verifiable registers of beneficial ownership are not a burden; they are our competitive advantage. They enable cheaper due diligence for firms and cleaner supply chains for investors, they protect small businesses by making procurement fairer and fraud harder, they strengthen our economy by rooting out corruption before it takes hold, and they give the British people confidence that when they pay their taxes, buy a home or open a small shop on the high street, the system is fair and honest.

The autumn Budget is scheduled for 26 November. After her Budget speech, tradition dictates that the Chancellor will go to the Two Chairmen for a well-earned gin and tonic. That pub, which I hasten to add is not accused of any wrongdoing, is owned via the Isle of Man and leased to Greene King, which is itself owned via the Cayman Islands. I think that encapsulates just how out of hand the shadow financial system has become.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Mr Twigg. I thank the hon. Member for Bolton West (Phil Brickell) for leading today’s debate with such a detailed, informative speech. We are all impressed by the way he set the scene.

This United Kingdom is made up of four countries that are directly impacted by public finances in how we can distribute allocated money and what we have the capacity to deal with, so this debate is important. There is already a strain on public finance; we all witness it every day. We see our public Departments struggling, especially health and education. Whether it is here or back home, the issues are the same. We must also note that the Chancellor has not yet ruled out tax rises ahead of the Budget. The public are already taking on the burden of the UK’s debt.

We have seen, and the Government are aware of, countless instances of tax evasion and avoidance by people in the United Kingdom, especially in the jurisdiction of the Cayman Islands. That contributes to lost tax revenues across the country. My issue is the loss of tax revenue—money that should be spent in this country on our own people. The UK Treasury loses billions each year to offshore tax avoidance. Northern Ireland relies on the block grant from Westminster through the Barnett consequentials for our devolved Government, so this tax avoidance and evasion means less funding for crucial sectors in Northern Ireland such as health, education and infrastructure. That is frustrating for people. [Interruption.]

[Joe Powell]

Will the hon. Gentleman give way?

[Jim Shannon]

Just for a second; thank you.

[Joe Powell]

I thank the hon. Gentleman for joining the last debate we had on this topic in this Chamber seven months ago. Does he agree that the link we are discussing between the overseas territories and the sorts of criminal activity that we all see demonstrates that the British public would be on side with cleaning up this mess?

[Jim Shannon]

I thank the hon. Gentleman for giving me the chance to get my cough sorted; I appreciate that very much. I agree with him.

There is obvious unfairness in taxation, especially because citizens face higher scrutiny than wealthy users of offshore arrangements. For example, the average person will at some point in their life be hit with a tax bill—that dreaded letter that comes through saying, “You haven’t paid enough tax.” The same does not go for those who partake in tax avoidance. The Treasury should do more to ensure that such people pay into the system just the same as everybody else.

The UK’s register of overseas entities 2022 revealed that several properties in Northern Ireland were held via entities in secrecy jurisdictions—more evidence of offshore-linked ownership of commercial and residential assets, especially in Belfast. Such investments can inflate property value and cause confusion over true ownership of property. That has a great impact on the ordinary person.

My focus and my responsibility are my constituents and the money that they must lose from their wages each month to increase Government spending. There must be more clarity and better insight. Government must do more to reinstate trust with the public, because there is disillusionment when it comes to finance. The Minister is a good and honest man. I look to him for an acknowledgment that Northern Ireland and the devolved nations suffer as a result of this and that he will endeavour to do more for this country to protect finance and, ultimately, my constituents.

--- Later in debate ---

[Joe Powell (Kensington and Bayswater) (Lab)]

I congratulate my hon. Friend the Member for Bolton West (Phil Brickell) on securing this debate and on his election to the chair of the excellent all-party parliamentary group on anti-corruption and responsible tax. I thank other Members here and the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) for championing this issue.

We last met in this Chamber to debate this issue seven months ago to the day, so it is helpful to have another debate to check on progress and demonstrate to the overseas territories the strength of cross-party feeling about it. Such debates do have an impact. My hon. Friend the Member for Bolton West and I were featured in a cartoon in a BVI newspaper not long ago for bringing this issue up so frequently in the House—I take that as a badge of honour.

The Government’s commitment to make London the anti-corruption capital of the world, as opposed to a dirty money capital, is extremely welcome. I know the Minister is personally committed to that agenda, and I look forward to the anti-corruption strategy in the next few weeks.

[Sir Andrew Mitchell]

Although the hon. Gentleman may have been in a cartoon, Baroness Hodge and I were the subject of a demonstration in one of the overseas territories, with placards saying, “Let’s hang Mitchell and Hodge”.

[Joe Powell]

I am sure we all agree that we would not support that action.

I want to make a serious point about where progress has been made. Some of us recently met the leader of Gibraltar, Fabian Picardo. Gibraltar now has an open register, and he told us that it has had no impact on investment there. In fact, it has attracted a different type of investor: those making sustainable, long-term investments into a reliable market where financial secrecy is not undermining the strength of the financial services.

I note that in the Public Gallery there is a representative of St Helena, which has made great progress—as others have said, we are also meeting representatives of the Cayman Islands and Bermuda. Although it is not perfect, there has been political commitment from those leaders to make progress and work together.

But the harms are still severe: serious organised crime, drugs on our streets, the high streets issue that many hon. Members have spoken about, sanctions evasion, tax dodging, environmental crime, destruction of tropical forests and property. I invite Members to join me on our “Kensington Against Dirty Money” walking tour, which Baroness Hodge and I conduct in my constituency. The No. 1 source of foreign ownership of property—my constituency has 6,000 such properties—is the BVI. The question is: why? It is not a victimless crime, and we need to understand why it is happening.

Let me very briefly talk about next steps. I really welcome Baroness Hodge’s trip to the BVI. She is a fearless champion for this issue. It would be good to understand the BVI’s red lines for a legitimate interests test. I think it should be broad, reliable and repeated access for those journalists who have helped to uncover so many issues in the past, while maintaining the Government’s long-term goal of publicly accessible beneficial ownership registers as the gold standard.

The summit on illicit finance next year is a huge opportunity; it was great that the Deputy Prime Minister confirmed that on the world stage at the UN General Assembly this year. The summit will be 10 years on from the 2016 anti-corruption summit, where public registers of beneficial ownership for UK companies were first introduced. Could the summit be the moment when we finally move forward on this issue, too?

Ukraine

Joe Powell Excerpts

Wednesday 15th October 2025 Commons Chamber

[Yvette Cooper]

I thank the hon. Member for his kind words. I agree with him that there must be no other option for Putin than to cease aggression and that this is ultimately about hope for Ukrainian children.

[Joe Powell (Kensington and Bayswater) (Lab)]

I strongly welcome the sanctions targeting the $108 billion in oil revenue that the Kremlin received last year and the progress on the $350 billion in frozen Russian sovereign assets. I applaud the Foreign Secretary and the Chancellor for their efforts in building a coalition with the EU and others to move from using the interest payments to using the capital. Does she agree that that recent breakthrough shows that legally this money should be treated as a downpayment on the reparations for the horrific harm that Russia has caused, which we know it will do everything to avoid paying?

[Yvette Cooper]

My hon. Friend makes an important point. The EU has set out work linking the issues around assets to reparation payments. We welcome that work and we believe that there is a strong basis to go forward. We need to do so in a co-ordinated way and recognise the importance of supporting Ukraine.

Gibraltar

Joe Powell Excerpts

Thursday 12th June 2025 Commons Chamber

[Mr Lammy]

On the first point, we have stuck to the political framework that was negotiated and agreed back in 2020 by the then Foreign Secretary, the former Member for Esher and Walton. I have a photograph from the agreement that was struck, of where we would be locating effectively a joint facility in the airport. There will be a second line queue, as there is in St Pancras, and there will be Spanish border guards and police situated in that second line. Of course, if there was an alert at that point—not on its own, but at that point—there would be a hand-back facility with the Gibraltar police, so they will be working alongside that Spanish team. If there was an alert, the individual would have the right to legal advice. They would be able to either return to their country of origin—let’s say the UK—or voluntarily go over to Spain to face questions. The key thing is that it is joint and alongside the work and efforts of the Gibraltar police and the Gibraltar customs and border guards.

[Joe Powell (Kensington and Bayswater) (Lab)]

I strongly welcome this political agreement and congratulate the Foreign Secretary and the ministerial team on achieving it. I recently met Chief Minister Picardo, alongside my hon. Friend the Member for Bolton West (Phil Brickell), the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) and other members of the all-party parliamentary group on anti-corruption and responsible tax, to welcome the progress that Gibraltar has made on anti-money laundering, including through publicly accessible registers of beneficial ownership. Will the Foreign Secretary confirm that it is the intent in the future EU-UK agreement that there will be a section on anti-money laundering? Does he agree that it sends a message to other overseas territories that tackling economic crime can be a strength in terms of business confidence and investment, and not something to be feared?

[Mr Lammy]

I am grateful for my hon. Friend’s work in this area. He will recognise that Gibraltar, as an overseas territory, is at the strong end of tackling issues of illicit finance and is paving the way. There is more work to do on this issue and particularly on beneficial ownership. I intend to take this forward, working alongside our new envoy in this area, Baroness Hodge, and culminating, I hope, in an event in London next year.

Israel and the Occupied Palestinian Territories

Joe Powell Excerpts

Tuesday 10th June 2025 Commons Chamber

[Mr Falconer]

I thank my hon. Friend for his kind words and for his commitment to issues throughout the region. He has been raising the concerns of his constituents with me since we were both first elected, and I am sure that he will continue to do so. I know that many people in Chipping Barnet are focused not just on the horrors that we have discussed in relation to aid provision and on the violence, but on the circumstances of the hostages, who remain very much in our minds. There is a British mother who is waiting for the safe return of her son. We will not cease our efforts to try to secure the release of those hostages.

[Joe Powell (Kensington and Bayswater) (Lab)]

I welcome the sanctions against Smotrich and Ben-Gvir, and the coalition that was built to exert maximum pressure. It is very significant, as the Government’s sanctions have been in other contexts around the world relating to human rights, corruption and other issues. Next week’s conference will be critical to, in the Minister’s words,

“defend the vision and viability of two sides living side by side in peace.”

Surely it is time to recognise the state of Palestine and agree a credible timeline with allies to bring this about. Will the Minister confirm that that is the Government’s objective?

[Mr Falconer]

My hon. Friend has extensive experience of international coalition building and of taking steps against those who support corruption or who, as in this case, breach human rights. I can confirm that we will work with our friends and allies to try to preserve a path to a two-state solution at the conference next week, in the way that he sets out.

Israel and the Occupied Palestinian Territories

Joe Powell Excerpts

Tuesday 20th May 2025 Commons Chamber

[Joe Powell (Kensington and Bayswater) (Lab)]

As others have said, 14,000 babies are at immediate risk of starvation—this could not be a more serious moment. I welcome the suspension of trade negotiations and the expansion of sanctions. However, with other sanctions designations—on human rights and corruption; on Russia, Georgia, Belarus and others—we have taken them to the political level. Will the Foreign Secretary consider extending the sanctions regime to the political decision makers advocating for ethnic cleansing and the takeover of Gaza?

[Mr Lammy]

My hon. Friend is one of the House’s experts on how our sanctions regime works, and I can reassure him that all that he has outlined is under consideration?

Oral Answers to Questions

Joe Powell Excerpts

Tuesday 13th May 2025 Commons Chamber

[Joe Powell (Kensington and Bayswater) (Lab)]

The reduction to 0.3% will require painful decisions, but there are innovative financing mechanisms on which Britain could lead—for example, increasing special drawing rights, using the exchange equalisation account, guarantees and debt relief. Can the Minister commit to working with the Treasury to look at all these non-ODA instruments in which Britain could show leadership and fund our development programmes?

[Stephen Doughty]

I absolutely can make that commitment. I will not go into any individual item on my hon. Friend’s list of suggestions, but as I said in an earlier answer, we are looking at all measures by which we can support development and economic growth globally, working with multilateral partners.

Israel: Refusal of Entry for UK Parliamentarians

Joe Powell Excerpts

Monday 7th April 2025 Commons Chamber

[Mr Falconer]

I know that my neighbour, the Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh), has also been on such a delegation. Like the hon. Member, he reported an incident with settlers. I refer the House to my previous statements about the expansion of settler violence and illegal settlements in the Occupied Palestinian Territories.

[Joe Powell (Kensington and Bayswater) (Lab)]

The power of bearing witness, as my hon. Friends were attempting to do, was shown at its most extreme in recent days by the paramedic Refat Radwan, who filmed the recent attack on 15 aid workers by the IDF before losing his own life. Does the Minister agree that in this case there must be accountability and not a cover-up?

[Mr Falconer]

I do believe that wherever there are incidents against humanitarian workers, including the one that my hon. Friend mentions, there must be full accountability.

Oral Answers to Questions

Joe Powell Excerpts

Tuesday 25th February 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Catherine West)]

We regularly engage with Northern Ireland on all matters of foreign policy. However, this Chinese consular matter is not something that Ministers can discuss at the Dispatch Box.

[Joe Powell (Kensington and Bayswater) (Lab)]

T7. I warmly welcome the massive sanctions package announced yesterday by the Government, but does the Foreign Secretary agree that China should be taking a significantly more proactive role in preventing its companies from supplying Russia’s military?

[Stephen Doughty]

I thank my hon. Friend for his praise and support for the action that the Foreign Secretary has just mentioned. This was our largest ever sanctions package since the start of Russia’s illegal and barbarous invasion. We and our G7 allies are absolutely clear on the principle that Russia must pay for the damage that it is causing to Ukraine, and we of course look at third country routes by which support is being given to Russia’s illegal actions in Ukraine. As part of the package announced yesterday we are taking a number of steps in that regard, including with companies in China.

Overseas Territories: Tax Transparency

Joe Powell Excerpts

Wednesday 5th February 2025 Westminster Hall

[Joe Powell (Kensington and Bayswater) (Lab)]

I beg to move,

That this House has considered tax transparency in the Overseas Territories.

It is a pleasure to serve under your chairship, Mr Turner. Having worked on anti-corruption, open government and transparency issues for more than a decade, I am often asked why such issues matter when there are so many pressing challenges facing our country. It can often seem an intractable problem—billions and trillions flowing through the international financial system that will end up elsewhere. What difference does it make to our constituents? I hope this debate will show directly why it matters to our Treasury and our tax take; to the housing crisis; to the fight against organised crime; to the enforcement of our sanctions against Putin; to fighting poverty around the world; and to restoring trust, transparency and accountability to our democracy.

This Government have made a strong start on combating illicit finance and kleptocracy. I particularly welcome the Foreign Secretary’s personal campaign on this issue, which has seen an expansion of our sanctions, the appointment of Baroness Hodge as the UK’s anti-corruption champion, and a cross-departmental team of Ministers charged with developing a new anti-corruption strategy, to which I know my hon. Friend the Exchequer Secretary to the Treasury has a strong commitment.

The Foreign Secretary’s ambition to transform Britian from the dirty-money capital to the anti-corruption capital of the world is absolutely the right objective. It matters for our international reputation and our standing in the world. To be taken seriously as a leader on democracy and anti-corruption, our own house has to be in order. The uncomfortable truth is that while some of the most notorious and brazen enablers of illicit finance and money laundering are operating as part of the UK family, we will not be able to claim that leadership role. Despite years of warm words and communiqués about fighting economic crime, the overseas territories are still one of the premier global destinations for moving dirty money, and it is time for that to change.

Since the full-scale invasion of Ukraine in 2022, I have led the local Kensington Against Dirty Money campaign in my constituency of Kensington and Bayswater, where more than 6,000 properties are owned overseas. Our most popular activity is a local kleptocracy tour of often empty mansions owned by autocrats and their supporters from around the world. Transparency International found that £5.9 billion in suspicious funds had been used to purchase UK properties through shell companies registered in the overseas territories, with £1.1 billion of that in my constituency. The ownership vehicle of choice is an anonymous trust, with the most popular location being the British Virgin Islands. The BVI has a population of less than a quarter of my constituency, so it would be highly surprising if BVI residents were the beneficial owners of the properties.

Thanks to investigative journalists and a series of high-profile leaks from the Panama and Paradise papers to “Cyprus Confidential”, we know who the actual owners are. That is why the previous Government—with thanks to the right hon. Member for Sutton Coldfield (Mr Mitchell)—took action in the previous Parliament with cross-party support to implement a register of overseas entities. That gives us good and helpful information, but a glaring loophole remains. Trust-owned property does not need to be declared—and in the Royal Borough of Kensington and Chelsea that accounts for 40% of the foreign-owned property. That allows the UK property market to continue as a laundromat for illicit finance. I ask the Government to look at closing this loophole and adding trusts to the property register as soon as possible.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

Does my hon. Friend agree that without those actions there is a real danger that significant sums of Russian assets and money, which could be sanctioned and used to reconstruct Ukraine, will be left in the hands of the supporters and perpetrators of the war in Ukraine?

[Joe Powell]

I completely agree. Without transparency, we cannot follow the money. We have some prominent examples of properties owned by sanctioned oligarchs that came into the sanctions regime only after investigations uncovered those assets. Keeping the anonymous trust option available, without the requirement to declare the true owners, allows for exactly the sort of behaviour that my hon. Friend outlines.

The main opposition is from some highly self-interested trust lawyers, so I urge the Government to take on those claims and bring trust-owned property into the register, which would help us not only to fight economic crime but to revitalise our high streets, where buildings often sit empty because enforcement action cannot be taken when the true owners cannot be tracked down. Indeed, some of my constituents were evicted using a spurious section 21 notice by an anonymous landlord who was based overseas in a tax haven.

My local walking tour, as part of the Kensington Against Dirty Money campaign, ends outside Roman Abramovich’s frozen mansion, which he purchased for £120 million, on Kensington Palace Gardens. In the past week or so, Abramovich has again been in the news, this time for allegations that he owes approximately £1 billion in UK taxes. At the heart of this story are, again, the UK overseas territories. Abramovich and his advisers used a complex web of corporate structures, via Cyprus and the BVI, to use money from the sale of Sibneft back to the Russian Government at huge profit in 2005. They set up approximately 200 hedge funds and maintained that the operations were happening in the BVI, but it has now been uncovered that the real activity was continuing in London—indeed, in Stamford Bridge itself.

This is potentially the biggest tax case since Bernie Ecclestone, and it is vital that His Majesty’s Revenue and Customs has the resources it needs to investigate. Enforcement of the rules and regulations is critical to recovering as much money as possible for the Exchequer and supporting the Minister’s efforts to improve the public finances. It is also time to upgrade our anti-money laundering supervision regime for professional bodies such as accountancy and legal firms, so that dirty money does not flow through the City. The previous Government opened a consultation, but it has not been responded to.

This is urgent, because Abramovich’s is not an isolated case. For years, the BVI has been the global destination of choice for those seeking maximum secrecy for their money. It featured prominently in the Panama papers, in which half of the exposed entities were linked to the BVI. That is why Parliament has clearly stated its will that public registries of beneficial ownership should be implemented across the overseas territories and Crown dependencies.

At the first Joint Ministerial Council of this new Government, in November last year, the BVI, alongside other overseas territories, promised reforms to ensure maximum transparency, and the Government reiterated their commitment to full public access in due course. I absolutely support the Government in this mission, which is why it was so deeply disappointing to see the BVI’s proposals around company registries, which were published last month. Access would be severely restricted. One provision would even allow company owners to be notified not only that someone is attempting to uncover their identity, but of who is making the request and why, putting investigative journalists and anti-corruption activists at risk of legal or physical intimidation. Worse still, that warning system could tip off criminals and give them a head start, allowing them to move illicit assets before enforcement agencies can act. Such measures do not protect business or privacy; they protect kleptocrats and criminals.

We know it can be done: Gibraltar has shown us what can be achieved. It introduced a public register that is similar to the one that the UK has had for several years. If Gibraltar can do it and we can do it, so can the BVI, the Cayman Islands, Bermuda and all the overseas territories. We must not let our Crown dependencies off the hook, either.

Many overseas territories have cited the privacy concerns outlined in the European Court of Justice rulings, but I encourage them all to review the sixth anti-money laundering directive, which would ensure that journalists, civil society, law enforcement and businesses with anti-money laundering duties all have access to the register anonymously and in full. I continue to believe that public registers are the best solution for the overseas territories and Crown dependencies, but minimum progress would be to meet that European regulatory standard.

It is clear from all the evidence—I expect we will hear much more today—that we need to do far more collectively to support the overseas territories to make progress on economic crime. The path forward is challenging, but I know the Government are seized of its importance. The overseas territories must meet the June deadline to make progress towards public registers. There must be no further delays. Trust-owned property should be included in the register of overseas entities. AML supervision should be strengthened to halt the enablers of dirty money. HMRC, the National Crime Agency and other enforcement agencies must proactively make cases and have the skills and resources they need.

To galvanise our international partners, the Foreign Secretary’s proposal for a summit of financial centres here in London would create a focal point for aligning rules and policies. I hope this debate will galvanise support across the House for the vital mission of tackling corruption and economic crime.

[Karl Turner (in the Chair)]

I remind Members that they should bob if they wish to take part in the debate.

--- Later in debate ---

[Joe Powell]

I thank the Exchequer Secretary to the Treasury for his response, and I thank all hon. Members who have spoken for their contributions. This has been a productive and constructive debate. There has been a lot of agreement on the problem. We heard the tax case very strongly, particularly from the hon. Members for Strangford (Jim Shannon) and Carshalton and Wallington (Bobby Dean). We heard the housing and communities case, particularly from my hon. Friend the Member for Cities of London and Westminster (Rachel Blake). We heard the economic growth case from my hon. Friend the Member for Bolton West (Phil Brickell), the poverty and inequality case from my hon. Friend the Member for Bournemouth East (Tom Hayes) and the constitutional case from the right hon. Member for Sutton Coldfield (Mr Mitchell), which took us through the history over the past decade of missed deadlines and opportunities for the action we are talking about to be taken.

I hesitate to say that this will be the last debate in this place on this topic—I suspect it will not be—but I welcome the Exchequer Secretary’s commitment. I think he was being quite polite when he said that the Government wished to see an improvement to the BVI’s proposal. The BVI needs to go back to the drawing board and bring back a proposal fully in line with the principles that Parliament concluded were the best action for this problem, which is full public registries of beneficial ownership.

In final closing, I thank the spokespersons for the Liberal Democrats and the Conservatives, the hon. Members for Lewes (James MacCleary) and for Wyre Forest (Mark Garnier), respectively, for their constructive contributions. I agree that there may be some legitimate uses of offshore tax centres, in particular for companies in multiple jurisdictions, but the heart of the problem is that the BVI, the Caymans, Bermuda and others are still far too susceptible to very serious illicit crime.

If there is one message that I would like all hon. Members to take home it is that this is not an abstract problem. It is not something just to do with billions and trillions in the financial system. It is about constituents who are being chased by HMRC who feel the double standards; it is about our housing crisis and empty properties; it is about our sanctions, their enforcement, and support for autocrats such as Putin, and it is about our public finances.

We have a strong case for why we need to act, and I reiterate my thanks to the Minister for his outlining of the next steps. The June deadline to see progress from the overseas territories is imminent, but as the right hon. Member for Sutton Coldfield said, this area is littered with missed deadlines. We need a proper deterrent from the British Government to say what will happen if the territories pass those deadlines and no action has been taken.

[Mr Mitchell]

Will the hon. Gentleman give way?

[Joe Powell]

If I am allowed to.

[Karl Turner (in the Chair)]

Sure.

[Mr Mitchell]

We have another three minutes, so I am keen to help out.

To be clear, we are talking here about dirty money and the source of this money—money stolen from Africa and from Africans. The baddies have all the best tunes, and they have the money to get their way, so the forces of law and order are always fighting to catch up. It is important to emphasise the open registers. The mist fell from all our eyes when, thanks to the BBC and The Guardian newspaper, the Paradise and Panama papers were published. They showed that, without this open register approach, we cannot join up the dots to see what those clever villains are doing, catch them, trap the money and hopefully return it. The hon. Gentleman and I agree completely, but I hope that we can carry the Government with us.

[Joe Powell]

I thank my co-chair of the all-party parliamentary group on anti-corruption and responsible tax, where we talk about this a lot.

Exhibit A is the UK public register of company ownership—when introduced, we were told that there would be all sorts of capital flight and that people would not come here to buy properties and invest, but that has simply not been the case. The register has now been in existence for several years. In fact, many of the countries that were the source of corruption and dirty money are now implementing public registries: Nigeria, Indonesia and Kenya, to name but a few.

We know action is possible—Gibraltar and others among the overseas territories have already done it—and it is now incumbent on the others to follow suit. I implore the Government to keep the pressure on so that we do not have to come back too many more times to debates such as this to re-analyse the same problem that we all agree is there, when we know the policy solution is within our grasp.

Question put and agreed to.

Resolved,

That this House has considered tax transparency in the Overseas Territories.

UK-Ukraine 100-year Partnership

Joe Powell Excerpts

Monday 20th January 2025 Commons Chamber

[Mr Lammy]

I am very grateful to the right hon. Member for raising this issue. Ukraine’s rightful place is in NATO—allies agreed at the July summit in Washington that that was the rightful place of Ukraine over time. However, he is right that guarantees will be necessary. It is a matter of intense discussion. We have been the European country that has led on our military support for Ukraine, so he is absolutely right that we would expect to play a role in that when the day comes, working with other allies. As President Zelensky has said, the US would have to play a role in that, too.

[Joe Powell (Kensington and Bayswater) (Lab)]

I thank the Secretary of State and the Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), for their leadership on sanctions. We know that Putin’s shadow fleet is still a major source of financing for the war, and that cutting it off is vital to bringing him to the negotiating table and, crucially, preventing him from rearming later on. How does the Secretary of State plan to persuade allies and counterparts —including some of our own British overseas territories—to clamp down on sanctions evasion and expand the capture of the shadow fleet to the full extent of that fleet?

[Mr Lammy]

I am so grateful to my hon. Friend for the work he did on these issues prior to coming to Parliament, and for the work that he continues to do. He will be pleased that this is a subject we have raised, particularly with the overseas territories. It is also something I have raised with both the Indians and the Turks, where we have seen some going behind the rules that we have made in order to inadvertently benefit Russia.