A cross-party group of MPs will today up the ante on the UK's overseas territories, hoping to force them to adopt the same transparency laws as the rest of Britain.
80 MPs from across seven parties will support adjustments to the Criminal Finances Bill stipulating the UK's overseas territories, such as the British Virgin Islands and Cayman Islands, must disclose full ownership details. Some territories have been labelled tax havens by critics.
The current version of the bill requires the UK mainland to adopt full transparency standards by 2020 – there is particular focus on providing a clear audit trail to the ultimate owners of financial structures.
However, the former chair of the public accounts committee, Margaret Hodge, wants every UK overseas territory to also adhere to the same level of transparency in an attempt to crack down on tax havens.
The Labour MP said it was "astonishing" the current draft of the bill failed to mention the UK's tax havens.
Nevertheless, Barry Vitou, the head of global corporate crime at law firm Pinsent Masons stressed the use of offshore jurisdictions did not necessarily mean those involved wanted to dodge tax.
"There are totally legitimate reasons for using these offshore territories to structure your affairs, including privacy," he said. "However, unfortunately this conflicts with a global appetite for transparency."
And Vitou continued that once one country has laxer laws on ultimate beneficial ownership, there is the danger the whole system falls apart.
"If transparency trumps privacy then you need to have transparency across all of the links," he said.
Seven Conservative MPs are among the 80 listed in favour of the amendment, one of whom is former international development secretary Andrew Mitchell. He said:
The coalition government, led by David Cameron, led the world in tackling corruption and tax evasion, and should be congratulated for being the first G20 country to publish a register of who owns which companies.
Some good action has been taken on ensuring that the UK’s overseas territories follow suit. I hope this amendment will help the UK government to persuade the overseas territories to adopt the same level of transparency as the UK.
BVI's best in class?
Meanwhile, one overseas territory that has attracted attention, the British Virgin Islands (BVI), said it is already complying with international standards on transparency.
"BVI's focus has always been on developing an effective system," said Benito Wheatley a director in the BVI's London office.
"To this end, next year we will be rolling out an innovative virtual platform that will allow BVI law enforcement agencies direct access to beneficial ownership information enabling them to share that information with their UK counterparts within 24 hours."