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Hundreds of companies based in British Overseas Territories contribute to £250bn worth of economic crime

Hundreds of companies based in British Overseas Territories contribute to £250bn worth of economic crime
Joint Ministerial Council meeting a chance to move towards transparency

4th December 2018, London – This week’s Overseas Territories Joint Ministerial Council, in London, should begin moves to end corporate secrecy in Britain’s Overseas Territories – and not just be a forum to air objections to coming reforms.

New analysis by Transparency International UK has found 237 global economic crime cases – worth £250 billion – were enabled by 1,107 companies based in the British Overseas Territories. An analysis of the £4.4 billion worth of UK property we have found to be bought with suspicious wealth also shows three fifths is owned by companies based in these jurisdictions.

Shell companies based in the British Virgin Islands were by far the most commonly used, making up 92 per cent of the companies found. Transparency International has also identified the countries where the crimes these companies helped facilitate – such as embezzlement, rigged procurement and bribery – took place, with Russia being the most frequent location. Ukraine, Kazakhstan, Nigeria and Azerbaijan also feature in the top 5 countries where the original offences took place.

In May this year the UK Parliament voted to require the British Overseas Territories to introduce public registers revealing the individuals behind companies that are incorporated in their jurisdictions. This will deprive corrupt individuals from around the world a haven from where they have been able to channel illicit wealth anonymously. Since the UK Parliament voted for these reforms, political leaders in many of these jurisdictions have sought to challenge this ruling. Transparency International is calling on both the British Government and the Overseas Territories to use the Joint Ministerial Council to make progress towards introducing company ownership transparency by the timelines set out by the UK Parliament.

Duncan Hames, Director of Policy at Transparency International UK, said:

“It’s disappointing that the British Overseas Territories have resisted further progress towards corporate transparency in their jurisdictions. Our new analysis is a stark reminder of the damage wrought by anonymous companies registered in secrecy havens like the British Virgin Islands; these are not victimless crimes. When money is stolen from state budgets it is schools and health services for ordinary people that suffer.”

“As law enforcement agencies know too well, at the heart of most serious corruption and money laundering cases are anonymous companies whose real owners are hidden from scrutiny by lawyers, accountants and rogue professionals. The secrecy made possible in the British Overseas Territories has been key to criminals across the world enjoying impunity for their actions. It does nothing to aid the reputation of financial centres to provide services and secrecy that enrich a corrupt global elite at the public’s expense.”

“We are calling on all present at the Joint Ministerial Council to take their obligations to society seriously and stop seeking ways to halt the march towards transparency. The UK Government must assist the Overseas Territories in opening up information on companies based there to public scrutiny. As the UK prepares for a future outside of the EU its reputation as an international financial centre will stand or fall on reforms in its offshore networks.”

***ENDS***

Recommendations:

1. The UK Government must set out public and time-bound plans for providing assistance to the Overseas Territories to enable them to establish public registers of beneficial ownership

2. The British Overseas Territories should themselves work to bring in such registers

3. The British Overseas Territories should give law enforcement agencies in the UK open access to their company registries to assist with any new or ongoing investigations

 

Summary of new statistics:

  • 1,107 companies registered in British Overseas Territories involved in 237 cases of economic crime, representing £250bn
  • 90% of these 237 cases involve companies registered in the British Virgin Islands
  • 17% of the 237 cases involved economic crime where Russia was the country of origin for the offence
  • 63% of the £4.4 billion worth of property we have identified as being bought with suspicious wealth owned by companies based in British Overseas Territories

 

Contact:
Dominic Kavakeb
Dominic.kavakeb@transparency.org.uk
020 3096 7695 07545 965 302

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Read 255 times Last modified on Wednesday, 5 December 2018 16:17

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