UK could force Crown Dependencies to reveal offshore investments


Money laundering through offshore finance centres has become a “matter of national security” for the UK – giving it grounds to have legal authority over the Crown Dependencies to end financial secrecy, a Westminster report has said.

In a report released last week, entitled Moscow’s Gold: Russian Corruption in the UK, the Foreign Affairs Select Committee is urging the UK government to follow this with further move towards increased transparency in all of the UK’s offshore centres.

As a result, the Crown Dependencies – Jersey, Guernsey and the Isle of Man – and British Overseas Territories, including the Cayman Islands, Bermuda and the British Virgin Islands, could be forced, whether they like it or not, to reveal offshore holdings.

According to Jersey-based news outlet The Jersey Evening Post Jersey Finance chairman Geoff Cook, pictured left, has hit out at the UK for accusing Jersey of being a route for “dirty money” as “unfair and untrue”.

Geoff-Cook-Jersey-FInance-new-cropped-286x300 “To be clear, Jersey is not a route for dirty money to enter the UK. Money laundering is a crime in Jersey and we have robust and clear regulations in place to detect and deter it,” Cook told The JEP.

The UK Foreign Affairs Select Committee is made up of five Conservative, five Labour and one SNP MPs and is chaired by Tom Tugendhat MP.

Its report says that too much “dirty” Russian money has been entering the UK, with the offshore jurisdictions acting as ‘laundromats’, due to the secrecy of their banking systems, before the money enters into the UK.

The report follows recent UK moves against Russia internationally, after the recent poisoning of former spy Sergei Skripal in Salisbury.

Beneficial ownership 

Last month, the House of Commons passed an amendment to the Sanctions and Anti-Money Laundering bill calling for the British Overseas Territories, such as Cayman, Bermuda and the British Virgin Islands, to introduce a transparent register of beneficial ownership of companies by 2020.

The UK has now said that it could now force the Overseas Territories into action if they do not voluntarily introduce transparent registers by the deadline as it is now a “matter of national security”, even though the report accepts that transparent registers could damage the financial services industries of offshore centres and suggests the UK should assist in rebuilding their economies.

National security

“While the government should continue to respect the autonomy and constitutional integrity of the Overseas Territories and Crown Dependencies on devolved matters, money laundering is now a matter of national security, and therefore constitutionally under the jurisdiction of the UK,” the report states.

“The Overseas Territories and Crown Dependencies are important routes through which dirty money enters the UK. This cannot continue. While we recognise the important innovations that Overseas Territories such as the British Virgin Islands have made in making registers of beneficial ownership available to UK law enforcement, the scale of the problem and the implications for the UK’s security now demand a greater response.”


Via: International Investment


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