The deputy UK foreign secretary said that nearly 40% of dirty money is sent through the City of London, and other Crown dependencies.
Andrew Mitchell said the Foreign Office will be putting pressure on crown dependencies, overseas territories and other countries to comply with UK legislation establishing public registers for beneficial ownership.
Since the House of Commons passed legislation in 2016, the UK has been faced with prevarication by overseas territories that are unwilling to establish public registers which disclose the ultimate owner of funds in tax-havens.
Mitchell told the Bright Blue thinktank: “It is important to recognize that Britain has an interest in this fight against dirty money. Some estimates claim that 40% of the money laundered around the globe – money stolen from Africa by corrupt businessmen and politicians, warlords, etc. – comes through London, overseas territories, and crown dependency.
He said that “crown dependency and overseas territories have not done as much as is required”.
Mitchell predicted that the UK, with David Cameron in charge of foreign affairs, would “see an increased emphasis on the introduction of these open registers for beneficial ownership”.
He warned that if these overseas territories and Crown Dependencies want our king and flag, they must accept our values. That is why we’re so determined to stop dirty money from flowing in and out of there.
The minister stated that when the British presided over the G8 industrialised nations group in 2016, Lord Cameron “put the attack on dirty cash and the importance” of open registers for beneficial ownership at the forefront.
After his resignation in 2016, it is generally accepted that the government’s momentum in fighting corruption in overseas territories waned.
In 2018, the UK passed a new law that required the government to publish a draft order of council by 2020 imposing beneficial owner registers, after a backbench Conservative revolt.
Mitchell was a Tory rebel MP when he was a backbencher.
British Virgin Islands, as well as the Cayman Islands, have not yet introduced public registers. They are now citing European Court of Justice (ECJ), rulings in order to restrict access to the registers. The BVI and Cayman islands are not subject to ECJ decisions.
In 2013, the BVI Financial Services Minister Lorna Smith announced that the government would not move forward with plans to create publicly accessible registers due to an ECJ decision she claimed could violate people’s rights.
The Cayman Islands Government soon after said: “We’re currently working to provide access to members of the general public who satisfy the ‘legitimate interests test’ as required by this case. This includes parties that are genuinely interested in obtaining information to help prevent or combat money-laundering and terrorist financing.
We anticipate this enhanced framework to be introduced by [late] 2024.
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