Bipartisan amendment forces UK government to impose transparency on its offshore tax havens

One cute side-effect of Brexit is that it got the UK out of pending EU rules limiting financial secrecy as part of a crackdown on money laundering by looting dictators, one percenters, and criminals; the Tories had put a process in train to come up with a made-in-Britain version, which was always going to be weaksauce thanks to the outsize influence of the City of London and its finance bosses on UK politics, but even that was killed by Theresa May's disastrous snap elections last year.

A year later, the Tories were ready to take another run at a largely symbolic anti-money-laundering rule, which would have allowed the country's notorious tax havens (Bermuda, the Caymans, the Channel Islands, the BVI, Gibraltar, etc) to continue their practice of registering companies anonymously, a key part of the global trade in trillions' worth of dirty money.

But at the last minute, a bipartisan amendment introduced by Labour's Margaret Hodge and the Conservative MP Andrew Mitchell has been accepted by the government; it imposes a transparency requirement on British Overseas Territories, forcing them to disclose the beneficial owners of their shell companies.

Tory MPs argued against the amendment, saying it would just push the dark money to other empires' tax-havens. British Overseas Territories are the world's worst offenders when it comes to money laundering, with the full scale of their involvement revealed by The Paradise Papers, The Malta Files, and The Panama Papers (which could just as easily have been called "The BVI Papers").

The Hodge/Mitchell amendment requires the 14 overseas territories, including the financial centres of the British Virgin Islands and the Cayman Islands, to introduce public ownership registers by the end of 2020 or face having them imposed by the UK government.

Duncan told MPs that ministers were reluctant to dictate to the overseas territories, but acknowledged: "We have listened to the strength of feeling in this house on this issue and accept that it is without a doubt the majority view of this house that the overseas territories should have public registers."

About half of the companies referred to in the Panama Papers, offshore ownership disclosures revealed by a consortium of investigative journalist organisations including the Guardian, were set up in the British Virgin Islands (BVI), according to Transparency International. The campaign group Global Witness estimates that £68bn flowed out of Russia via the British overseas territories between 2007 and 2016.

'Dirty money': U-turn as Tories back plans to make tax havens transparent
[Dan Sabbagh/The Guardian]

(via Naked Capitalism)