London: The worldwide black money laundering hub
According to the UK’s deputy foreign secretary, the City of London and its royal dependencies manage about 40% of the world’s illicit funds.
According to Andrew Mitchell, the overseas Office will impose additional requirements on crown dependencies and overseas territories to comply with UK regulations that maintain public records of beneficial share ownership.
Since the House of Commons passed legislation in 2016, the United Kingdom has faced opposition from foreign governments that are unwilling to establish public registries that expose the genuine owners of funds stored in tax havens.
Mitchell told the Bright Blue thinktank: “On the problem of dirty money, it is critical to understand that Britain has a dog in the fight. According to some estimates, London and foreign territories and crown dependencies account for 40% of global money laundering, which is money that is frequently taken from Africa and Africans by unscrupulous businesspeople, bent politicians, and warlords.
Mitchell stated that the UK will “see a greater emphasis now on introducing these open registers of beneficial ownership” now that David Cameron is foreign secretary.
He warned: “If these overseas territories and crown dependencies wish to have our king and our flag, they must also accept our ideals. That is why we are so intent on ensuring dirty money cannot flow in and from there.”
Lord Cameron, according to the minister, brought the issue of dirty money and the importance of public beneficial ownership records “front and center” when the UK chaired the G8 group of industrialized nations in 2016.
It is widely accepted that the government’s determination to pursue corruption in its overseas territories diminished when he resigned as prime minister in 2016.
Nonetheless, in response to a backbench revolt by Conservatives, the UK passed legislation in 2018 requiring the government to submit a draft order in council implementing beneficial ownership registers by 2020.
Backbencher Mitchell was one of the rogue Tory MPs of the time.
The British Virgin Islands and the Cayman Islands, which have yet to establish public registers, are currently imposing restrictions on who can access them in accordance with European Court of Justice (ECJ) rulings. The ECJ’s decisions do not apply to the BVI or the Cayman Islands.
Lorna Smith, the BVI minister of financial services, announced in 2013 that the government would not proceed with plans to construct publicly accessible registries because of an ECJ ruling that she feared could infringe people’s human rights.
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