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Money laundering – are BVI leaks a game changer?

Written by Robert Barrington on Sunday, 7 April 2013

The recent leaks of information about who actually owns the companies registered in the British Virgin Islands offer a first glimpse for many people into this very murky world.


The recent leaks of information about who actually owns the companies registered in the British Virgin Islands (BVI) offer a first glimpse for many people into this very murky world.

For years small amounts of information have trickled out – often through court cases – that indicate these so-called secrecy jurisdictions offer a haven for corrupt money. 

The new leaks give us more evidence than ever before that such secrecy has long departed from its ostensible purpose of protecting privacy – it has become a framework through which illegitimate funds can be laundered and hidden with consummate ease.

The BVI officials apparently claim that as a well-regulated regime they are able to root out illegitimate money. With the best will in the world, this is unlikely to be the case. London, with all its resources and regulation, cannot do so. How could it be that a tiny island with a minute regulatory and enforcement capacity would be any better? The recently-published photograph of the company registration office in Cyprus is very revealing and Helen Garlick’s recent presentation to the UK Parliament on law and enforcement capacity in the Turks & Caicos Islands reinforces this.

The question being debated in anti-money laundering circles is this: are the BVI leaks a game-changer? Have the BVI leaks blown apart the defence that secrecy is solely about legitimate privacy? It seems inevitable that this should be so. There is so much information that it will take a while to understand the full implications. But what is already apparent is that many government officials and politicians are using the BVI to hide their money and among them are some very unsavoury characters.

The Prime Minister has declared that transparency will be one of the three key themes of his G8 Presidency. This is a chance for him to live up to this promise. His government needs to make sure that neither the UK’s Overseas Dependent Territories or Crown Dependencies, nor the City of London, is able to be a safe haven for corrupt money. Transparency, including over beneficial ownership and nominee directors, is a key part of the solution.

Further information
Blog post: How to set up an offshore company in 10 minutes
Feature: Financial secrecy in the spotlight
Letter: TI makes recommendations ahead of the G20 meeting of the Ministers of Finance and Governors of Central Banks 

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Read 15927 times Last modified on Tuesday, 24 November 2015 11:47
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Robert Barrington

Robert is TI-UK's Executive Director. You can view his full bio here, and tweet him @TIukED.

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