Financial Transparency: Overseas Territories

Stephen Doughty Excerpts

Wednesday 5th November 2025 Westminster Hall

[The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)]

I thank all right hon. and hon. Members, and particularly my hon. Friend the Member for Bolton West (Phil Brickell), for this well-informed and genuinely passionate debate. I have listened with great interest to a number of the examples that they raised. As he and others acknowledged, this issue is a personal priority for me, the Foreign Secretary, the Deputy Prime Minister and the Government as a whole. We must ensure the greatest standards of transparency, tackle illicit finance and tackle global corruption.

Members referred to our plans for the illicit finance summit next year, which I am working on closely with ministerial colleagues, and the anti-corruption strategy, which I have been working on closely with colleagues in the Home Office, the Treasury and elsewhere. We hope to present that strategy before the end of the year, and I hope that it will allay many of the broad concerns that have been raised by Members. I also pay tribute to Baroness Hodge for her incredible work as our anti-corruption champion. She has worked on these issues for many years, and I had the pleasure of working on them with her, but she is an independent voice, a challenge to the Government and a partner. She genuinely wants to find constructive solutions, and that has very much been the tenor of her work in the role so far.

I acknowledge the nuance in the contributions of right hon. and hon. Members on the subject of our overseas territories family and our wider British family. They recognised that substantial progress has been made in a number of them, that there are challenges in others and that not all overseas territories are heavily involved in financial services—in fact, some are barely involved at all. Some substantial progress has been made by the Government as a result of pressure and questioning not only from Members of this House but from the overseas territories, the wider NGO media and the global community. They want to see transparency and action against corruption and illicit finance for the purposes that were set out clearly by my hon. Friend the Member for Bolton West, as well as by many other right hon. and hon. Members.

Many Members drew connections between their constituencies, the priorities of the UK Government and the priorities of the Governments in the overseas territories. It is important to remember that lack of transparency, reputational damage, and the activities of very problematic individuals and serious and organised crime gangs, including sanctioned individuals, do damage not only in our constituencies but in the overseas territories. As the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) pointed out, that also does damage elsewhere in the world, particularly in the global south, Africa and other locations that, as he knows, I share his passion for.

My hon. Friend the Member for Bolton West set out very clearly how this problem impacts growth, housing and property, security and national security, and our national standing. That is why it matters, and that is why I know that this debate will not go away. The elected leaders in the overseas territories and their Governments will have heard clearly the strength of cross-party feeling, although I note with interest the absence of one party in this Chamber. I will leave Members to make their own minds up about that, but those Governments will see the strength of cross-party desire for action.

I am glad to say that we are taking an approach of co-operation and collaboration with our overseas territories. It is important to remind all Members of the constitutional relationship with our overseas territories. The Government and I respect their autonomy, decision making and elected Governments. They have extraordinarily robust debates in their own countries, and it is absolutely right that they should do so. I have set out my respect for them and my principles about working with them in partnership, and that will be reflected in the Joint Ministerial Council. Of course, the nature of the relationship with the Crown dependencies is distinct, and is for colleagues in the Ministry of Justice, Home Office and elsewhere to respond to, although I note the strong comments made on progress in the CDs.

It is also true that with our respect for their rights, the constitutional settlement and their autonomy, which I want to empower and strengthen, come responsibilities for overseas territories as part of the British family—responsibilities not only to the global rules-based order and the highest standards of financial transparency, but to their own populations and citizens. Hon. Members have made that point very clear.

Work in this area is vital. Illicit finance, corruption and kleptocracy are not abstract threats; they are direct challenges to our national security, our economy and the integrity of the global financial system. As has rightly been pointed out, these practices make it easier for criminal gangs to operate, undermine economies, make it easier to break sanctions and weaken the rule of law. The Government are leading the way when it comes to confronting these challenges, safeguarding our security and promoting integrity across the global financial system.

I was glad that hon. Members pointed out the excellent work on sanctions co-operation, including with the Cayman Islands. I had a chance to compliment the Cayman Islands on work on Operation Hektor on a recent visit there. We have also done excellent work with the British Virgin Islands, where our authorities have worked together on sanctions enforcement, and resource has gone into that. For all that to work effectively, of course, there needs to be transparency, because we cannot see what is really happening without understanding who owns what, where and how.

[Sir Andrew Mitchell]

Of course, the Minister is right about transparency—sunlight is the best disinfectant—but may I just pin him down on one point? He is heavy on collaboration and trying to get agreement, and he is right about that, but let us be absolutely clear that the constitutional relationship with the overseas territories and Crown dependencies is that Britain and Parliament are responsible for security issues and foreign affairs. These are security issues, and they relate directly to foreign matters. If the overseas territories do not agree to accept the will of Parliament, the Minister must make it clear to them that the Westminster Government will act via an Order in Council. That is not a voluntary thing; it is our duty. That is the nature of the constitutional arrangement, and the very clear legal opinion that Baroness Hodge and I secured underlines the point.

[Stephen Doughty]

The right hon. Gentleman is right about the legal and constitutional position. My position is that I want to work very closely and co-operatively, and that approach has succeeded in producing very welcome progress over the past year and a half. That is the way that I always try to approach our relationship with our friends in the overseas territories and the wider family. However, he is absolutely right, and the strength of feeling today should leave nobody in any doubt about the wider impact of the challenge and the concern, among many right hon. and hon. Members, about its direct impact in their communities. As I said, this is about the direct impact on citizens in the overseas territories themselves, as well as in the wider world.

I do not rule out any option in the future, but I hope that at first we can keep to and deliver on the commitments that were made at the Joint Ministerial Council last year. Some of those have been met; some have not. I have been very candid about that with the current president of the UK Overseas Territories Association, and have had very direct conversations with Premiers and others.

My hon. Friend the Member for Bolton West asked three specific questions. He asked about a visit with Baroness Hodge. I do not want to divulge our personal conversations, but he can be absolutely sure that we have met to discuss her findings, which she shared in great candour, as one would expect. I will take those on board. My expectation is that we will discuss this matter at the Joint Ministerial Council. The Premiers and elected representatives understand our position. Our expectation on fully public registers of beneficial ownership has not changed; nor has our expectation about the functioning of legitimate interest access registers in the meantime. I can assure my hon. Friend and others that we are engaging in forensic detail on how each of those works. For example, I had constructive conversations with the Premier of the Cayman Islands on my recent visit about the progress that it is making, and I expect further improvements in the months to come.

We follow these matters extremely closely and offer technical support and other advice on how we can work together co-operatively to deliver the most effective registers. For a register to be in place, with the necessary legislation, is all well and good, but if it does not function effectively because of fees or other barriers to its usability in practice, that is a serious concern. Obviously, there are territories that are yet to introduce such steps; the BVI, in particular, was mentioned.

My hon. Friend the Member for Bolton West asked whether I would meet his colleague from the AUGB and I would be happy to do that. The links to Ukraine that many right hon. and hon. Members mentioned are examples of why this matters. The Government’s recent action on Cambodian scam centres was mentioned. That was a shocking scam involving fraud against our constituents up and down this country, which involved property in London and involved a UK overseas territory, the BVI. I know the Premier of the BVI shares our concern about tackling that type of activity. It is in all our interests that we have the transparency to enable more of these scams—more of this shocking activity—to be exposed.

Many links were made to property, including by my hon. Friend the Member for Kensington and Bayswater (Joe Powell). I have seen examples in my own constituency of Cardiff South and Penarth, where residents faced with issues relating to fire and building safety have been unable to work out the original beneficial owners of large apartment buildings so that they can take appropriate action to ensure the safety of the buildings and their residents. Such issues impact every aspect of all our daily lives, including, as I said, in the overseas territories.

The BVI was mentioned extensively, so I want to be clear that the Government recognise some of the challenges. In August, a vessel owned by a BVI-registered entity transferred 2 million barrels of Iranian oil, which was delivered to China. Also this year, BVI-registered entities were discovered in the corporate chains of at least three sanctioned Russian oligarchs who own £35 million-worth of UK property, undoubtedly some of it in constituencies represented in this room. BVI-registered entities accounted for over 90% of identified suspicious funds invested through OTs into UK property between 2016 and 2024. We also have the challenge of inactive or dissolved BVI companies owning UK property. That creates substantial legal challenges around bona vacantia and ownerless assets, which many of us will have encountered in our constituencies.

As was rightly pointed out, in the three decades to 2018 more than 1,100 BVI-registered companies featured in corruption cases around the world. I know the seriousness with which the Premier and the Government there take these issues. I want to work with them in addressing them, because they impact all of us and they impact the BVI’s reputation, but to do that we need transparency and progress.

Colleagues made many important contributions and I will not be able to respond to them all in the time I have today, but I note the serious concerns about Mr Abramovich raised by my hon. Friend the Member for St Helens South and Whiston (Ms Rimmer). I am not able to comment on individual tax matters at the Dispatch Box, but we remain committed to ensuring that the proceeds of the sale of Chelsea reach humanitarian causes in Ukraine. We are deeply frustrated that it has not yet been possible to reach an agreement with Mr Abramovich and his representatives. The door for negotiations remains open, but we are fully prepared to pursue the matter through the courts if required, as we have said on a number of occasions recently.

Important points were raised, including by my hon. Friend the Member for Salford (Rebecca Long Bailey), about HMRC. I am sure she will be able to raise her points with the relevant Ministers, but what she said about why transparency principles matter was very powerful. My hon. Friend the Member for Bournemouth East (Tom Hayes) spoke powerfully about the impact on public services, on housing and on the high street, and about the challenges for our constituents. We have touched on all those points of nexus during the debate.

Financial secrecy is the oxygen that allows illicit finance to thrive and sanctions breaches to go undetected; it creates blind spots. It is, of course, a transnational problem. Dirty money pushes up property prices, making it harder for people to buy homes. Overseas corruption and illicit finance undermine economies, prop up kleptocratic regimes and threaten democracy. As the right hon. Member for Sutton Coldfield made clear, it is estimated that African countries alone lose around $90 billion a year in illicit capital flows. That is more than they receive in development assistance.

[Jim Shannon]

I thank the Minister for his detailed response to the issues that we raised. I mentioned the properties in Belfast that were allegedly held by certain people. Will he ensure that there is a concerted plan, driven from Westminster, for Scotland, Northern Ireland and Wales, to ensure that those people are held accountable wherever they may be in the United Kingdom?

[Stephen Doughty]

I absolutely agree. The hon. Member spoke powerfully for his constituency of Strangford, as he always does. The fact that this issue impacts every part of the United Kingdom has been made very clear during the debate.

I want to update the House on where there is progress and where challenges remain. At the last Joint Ministerial Council, overseas territories made important commitments to improve corporate transparency by widening access to their registers of beneficial ownership. As I set out in my written statement to the House on 22 July, all territories are making progress on their commitments to implement the registers, and that progress is welcome, but we need to keep up the pace and to challenge in cases where there has been real back-marking on the issue.

I compliment St Helena, which launched its fully public register on 30 June 2025. The Falklands has shown me its draft legislation and it will have that implemented by next year—there are some capacity constraints for its officials. As has been mentioned, Gibraltar has had a fully publicly register since 2020 without any damage to its economy; the Chief Minister speaks powerfully about that issue. I compliment Montserrat, which has had a public register since 2024. The Caymans launched its legitimate interest access register in February 2025, which allows access by a range of people, including journalists. Turks and Caicos launched an LIA register on 30 June, we understand that Anguilla will implement within the next few months, and we have talked much about Bermuda and the BVI.

I want to reassure all right hon. and hon. Members that this issue remains a major priority for the Government. The overseas territories will have heard this debate, and the strength of feeling. Our commitment on this issue sits alongside our commitments to the relationship with the overseas territories more broadly, and to tackling corruption and illicit finance globally, which will be highlighted by the summits that were mentioned.

[Charlie Maynard]

Will the Minister give way?

[Stephen Doughty]

I am conscious that I need to leave time for my hon. Friend the Member for Bolton West to wind up the debate, so I will not.

I want to reassure Members that this issue remains a major priority for me and other Ministers, and I am very happy to continue to engage with Members on it. I hope that we can celebrate the progress as well as providing resolute challenge.