Beneficial Ownership Registers: Overseas Territories and Crown Dependencies

Debate between Baroness Hodge of Barking and Matthew Offord

Thursday 7th December 2023 Commons Chamber

[Dame Margaret Hodge]

Indeed. I would love for us to be able to do this in a consensual way; that would obviously be the best way to proceed. Sadly, we have been waiting for 10 years, and my patience has worn a little thin. Given the implications both for national security and for the economy, the time has come to say, “Enough is enough.” We should use the powers that we have.

[Dr Matthew Offord (Hendon) (Con)]

The right hon. Member is being generous with her time. The 2022 ruling of the Court of Justice of the European Union stated that unrestricted public access to beneficial ownership information was incompatible with the right to life. Will she cover that?

[Dame Margaret Hodge]

I will. The hon. Member will know as well as I do that we are no longer a member of the European Union, so we are not bound by that finding.

Why does all this matter? The epidemic of tax avoidance, tax evasion and economic crime flourishes in an environment of secrecy, and our overseas territories and Crown dependencies facilitate that secrecy. We know from the ever-growing number of leaks of data on financial misdemeanours that their role is central to enabling economic crime. Half the shell companies exposed in the 2016 Panama papers were incorporated in the British Virgin Islands. In 2017, the Paradise papers—a massive tranche of documents leaked from the offshore law firm Appleby—showed that a frightening number of frontline politicians held secret accounts, with the overseas territories appearing prominently as destinations of choice for hiding money. Those included people such as Justin Trudeau’s chief fundraiser, Donald Trump’s Commerce Secretary, Brazil’s Finance Minister, Uganda’s Foreign Minister, and our own Lord Ashcroft, who had—and probably still has—a Bermuda-based trust where he hides some of his wealth.

Some 20% of the files in the FinCEN—Financial Crimes Enforcement Network—leak of 2020 contained clients that listed an address in the British Virgin Islands. The leak also revealed, because it was a leak of documents from an American agency, that the Americans viewed Britain as a higher-risk jurisdiction for its role in money laundering and financial crime. The Pandora papers leak of 2021 involved 12 million files, with data from 14 different law firms and company services providers. Over two thirds of the companies analysed in that batch of leaked documents were registered in the BVI. A World Bank review of 213 corruption cases that were investigated over the 30-year period to 2010 found that 70% involved anonymous shell companies. The UK, its overseas territories and Crown dependencies accounted for the second jurisdiction in terms of the number of corruption cases associated with it.