Financial Transparency: Overseas Territories

Andrew Mitchell Excerpts

Wednesday 5th November 2025 Westminster Hall

[Sir Andrew Mitchell (Sutton Coldfield) (Con)]

As vice-chairman of the all-party parliamentary group, I want to express my appreciation to the chairman, the hon. Member for Bolton West (Phil Brickell), for the brilliant way he has led the debate. He underlined that there must be an all-party approach, which he expressed with great eloquence and factual back-up. He made the point that we all have a constituency interest in this issue. We certainly recognise that in the royal town of Sutton Coldfield. I also thank his predecessor as chair, the hon. Member for Kensington and Bayswater (Joe Powell), who I note the Government have now neutered by putting on the payroll. As a former Government Chief Whip, I know exactly how these things work, and it is a recognition of his great abilities that he has now been put on the non-ministerial payroll.

I want to emphasise why this issue matters. We are talking about dirty money—money stolen from Africa and from Africans, money from the sex trade and money from the drug trade. Although Africa is my principal concern, because I believe that development is being held up by the enormous amount of money that is stolen from that continent, the hon. Member for Bolton West also made an extremely important point about tax. After all, in a few days’ time, the Chancellor will be looking for as much tax revenue as she can get. If she follows the hon. Gentleman’s advice, there is no doubt that billions would flow into the Exchequer, for the reasons that he set out.

For many years, we believed that closed registers were doing what was required. Closed registers enabled law enforcement authorities to dip into the details and, in the case of terrorism, get a response within 24 hours, but the publication of the Paradise and Panama papers showed definitively why we must have open registers of beneficial ownership. Without open registers, we cannot join the dots of who is doing what to whom. That is a very important point. The scales fell from our eyes when the Paradise and Panama papers were published—all praise to the BBC and The Guardian for doing so—as they showed precisely why open registers are absolutely essential. That is at the heart of this debate.

Let us be in no doubt, either, that we are talking about the Crown dependencies as well. They may come after the overseas territories in the Government’s enforcement action but, like the overseas territories, they are on the frontline of this issue. As the hon. Gentleman said, we are not talking about all the overseas territories. Many of them have implemented, or are implementing, registers in good faith; it is just a pity that some of them have not.

It is also worth saying that the UK has big questions to answer. From what the National Crime Agency said some years ago, we know that up to 40% of money laundering goes through London, the overseas territories and the Crown dependencies. That is one of the reasons why David Cameron made tackling corruption an important aspect of the G8 in 2016. Britain can be proud of leading that attack on dirty money. We should remember not only Britain’s leadership, but the fact that we have a dog in this fight.

I also want to emphasise how we got here. The hon. Member for Bolton West rightly said that the Government gave way because otherwise they would have been defeated—an embarrassing moment for me, as a former Government Chief Whip, to have led that rebellion with Baroness Hodge. With the Sanctions and Anti-Money Laundering Act we made it absolutely clear that, if the overseas territories did not accept the will of Parliament, it would be imposed through the ancient and arcane process of an Order in Council. Baroness Hodge and I took a legal opinion from some of the best lawyers in the country, including one of the most brilliant former Directors of Public Prosecutions, Lord Ken Macdonald. The opinion made it absolutely clear that the Westminster Parliament had the right, indeed the duty, to impose an Order in Council if the will of Parliament was not accepted in the overseas territories.

It so happens that the Foreign Office, with the skill and dexterity for which it is famous, interpreted that measure as meaning not that an Order in Council would be imposed after a year, but that it would be drafted after a year for imposition after another year—thus giving the overseas territories an extra year. That was condemned in the House of Commons by two former International Development Secretaries—myself and the Secretary of State for Northern Ireland, the right hon. Member for Leeds South (Hilary Benn)—and by two distinguished former Chairmen of the Public Accounts Committee, my right hon. Friend the Member for Goole and Pocklington (David Davis) and Baroness Hodge. It has still not been done. That is where we are now.

I echo the questions that the hon. Member for Bolton West asked the Minister. It is very important that we get a definitive approach from the Government to implementing that measure. The Minister is a good bloke. He and I have been discussing development matters for nearly 20 years, so I know exactly what his view is. I hope very much that he will stiffen up the relevant Foreign Office officials, who like to ensure good and harmonious relations, and who do not like a row. He must remind them that officials advise and Ministers decide. Ministers are the servants of Parliament, and Parliament decided as long as seven years ago why these matters must be brought to a head.

I have recently seen senior representatives from Bermuda and the Cayman Islands who, in my judgment, were truculent and disrespectful of the will of the Westminster Parliament. As the hon. Member for Bolton West rightly said, the BVI is one of the key countries that needs to accept that, if these overseas territories and Crown dependencies want to use the British flag and to have our monarch and our laws, they must also accept our values.

Although the hon. Member has admirably summed up the first of them, I will end my remarks by quoting three points in this excellent brief from the APPG, which I hope will be widely distributed. Backed by Transparency International, Tax Justice Network and others, the report deals with the impact of financial secrecy in the overseas territories on UK communities. The hon. Member spoke about Transparency International UK’s revelation that at least £5.9 billion-worth of suspicious funds have been used to purchase UK properties—an astonishing figure. Secondly, the Office of Financial Sanctions Implementation found that, since February 2022, over a quarter of all suspected sanctions breaches were made intermediary jurisdictions including the BVI and Guernsey. Finally, Transparency International UK’s research has linked to our overseas territories £250 billion-worth of funds diverted by rigged procurement, bribery and embezzlement in 79 countries, of which the British Virgin Islands accounted for 92%. What is more, Tax Justice Network’s report, “The State of Tax Justice 2024”, shows that countries are losing nearly £375 billion to multinational corporations and wealthy individuals using tax havens to underpay tax, with over £1 trillion in profits being shifted into tax havens.

Those are significant figures; they show why Parliament was absolutely right to vote for and implement the Sanctions and Anti-Money Laundering Act 2018. They show why today we need to hear the Minister say that his patience is running out, and that he will issue the Order in Council if the overseas territories do not accept the will of the British Parliament.

[Several hon. Members rose—]

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[Joe Powell (Kensington and Bayswater) (Lab)]

I congratulate my hon. Friend the Member for Bolton West (Phil Brickell) on securing this debate and on his election to the chair of the excellent all-party parliamentary group on anti-corruption and responsible tax. I thank other Members here and the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) for championing this issue.

We last met in this Chamber to debate this issue seven months ago to the day, so it is helpful to have another debate to check on progress and demonstrate to the overseas territories the strength of cross-party feeling about it. Such debates do have an impact. My hon. Friend the Member for Bolton West and I were featured in a cartoon in a BVI newspaper not long ago for bringing this issue up so frequently in the House—I take that as a badge of honour.

The Government’s commitment to make London the anti-corruption capital of the world, as opposed to a dirty money capital, is extremely welcome. I know the Minister is personally committed to that agenda, and I look forward to the anti-corruption strategy in the next few weeks.

[Sir Andrew Mitchell]

Although the hon. Gentleman may have been in a cartoon, Baroness Hodge and I were the subject of a demonstration in one of the overseas territories, with placards saying, “Let’s hang Mitchell and Hodge”.

[Joe Powell]

I am sure we all agree that we would not support that action.

I want to make a serious point about where progress has been made. Some of us recently met the leader of Gibraltar, Fabian Picardo. Gibraltar now has an open register, and he told us that it has had no impact on investment there. In fact, it has attracted a different type of investor: those making sustainable, long-term investments into a reliable market where financial secrecy is not undermining the strength of the financial services.

I note that in the Public Gallery there is a representative of St Helena, which has made great progress—as others have said, we are also meeting representatives of the Cayman Islands and Bermuda. Although it is not perfect, there has been political commitment from those leaders to make progress and work together.

But the harms are still severe: serious organised crime, drugs on our streets, the high streets issue that many hon. Members have spoken about, sanctions evasion, tax dodging, environmental crime, destruction of tropical forests and property. I invite Members to join me on our “Kensington Against Dirty Money” walking tour, which Baroness Hodge and I conduct in my constituency. The No. 1 source of foreign ownership of property—my constituency has 6,000 such properties—is the BVI. The question is: why? It is not a victimless crime, and we need to understand why it is happening.

Let me very briefly talk about next steps. I really welcome Baroness Hodge’s trip to the BVI. She is a fearless champion for this issue. It would be good to understand the BVI’s red lines for a legitimate interests test. I think it should be broad, reliable and repeated access for those journalists who have helped to uncover so many issues in the past, while maintaining the Government’s long-term goal of publicly accessible beneficial ownership registers as the gold standard.

The summit on illicit finance next year is a huge opportunity; it was great that the Deputy Prime Minister confirmed that on the world stage at the UN General Assembly this year. The summit will be 10 years on from the 2016 anti-corruption summit, where public registers of beneficial ownership for UK companies were first introduced. Could the summit be the moment when we finally move forward on this issue, too?

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[Charlie Maynard]

I did not know that, so I thank my hon. Friend for informing me.

How can we ask others to get their own house in order when we enable these entities on UK sovereign territory to beggar their neighbour on a global scale? The UK Government bear responsibility for this lack of transparency, as British overseas territories are subject to UK law in certain respects. The Sanctions and Anti-Money Laundering Act 2018, or SAMLA, requires the UK to support these territories in implementing public registers of company ownership, which are a crucial tool for combating tax evasion and financial crime. More specifically, section 51 of SAMLA allows the UK Government to make regulations requiring overseas territories to establish publicly accessible registers of the beneficial ownership of companies, and if they do not do so voluntarily, we have the power to enforce them to do so.

[Sir Andrew Mitchell]

On the point made by the hon. Member for Bournemouth East (Tom Hayes) about an Order in Council, will the hon. Gentleman confirm that his understanding is the same as mine, namely that an Order in Council is not a discretionary matter for the Government, and that it is there in the legislation that he just referred to? Parliament insists that if these territories do not comply and provide open registers, an Order in Council should be issued.

[Charlie Maynard]

Yes; I fully agree with the right hon. Gentleman.

Direct legislation should be a last resort, but it is necessary and we need to move quickly. SAMLA came into force in 2018, and we are now nearly in 2026. This is just playing for time, which is bad. Since 2022, the UK’s register of overseas entities regime has required that the details of all corporate trustees in the chain of an overseas entity’s ownership structure are registered and that the ultimate beneficial owners of real estate are identified. Information on the overseas entity and the beneficial owners should be accessible to all, online and for free.

I will review those top three overseas territories. Bermuda and the Cayman Islands now have registers of beneficial interest that are up and running. The BVI is getting there slowly, with existing companies having been given until the end of this year to file their information. However, and importantly, none of these three territories has a publicly open and accessible register. Instead, there is all sorts of obfuscation. I will give some examples.

Some of these registers require inquiries to have “legitimate interest”, whatever that may be. Access is possible only

“at the Commission’s Secretariat’s office by appointment, with no copying or scanning allowed, on written request, payment of a fee, and some limitations, during working hours”.

That is not complying with the spirit of the law—indeed, it is really unhelpful—and we have it in our power as a country to stop it. It leaves a strong impression that all three are doing their damnedest to withhold information on such a scale as to make the existence of the registers completely pointless.

Online, fully accessible and public access for all is not in place in any of the three jurisdictions, so I have two requests. First, can our Government set a deadline beyond which they will not tolerate a failure to provide an open, transparent register? They must use all their powers and leverage to work with these democratically governed British overseas territories to find a way to bring them quickly into line with UK standards of transparency and accessibility regarding these registers.

My second request is about the Crown dependencies—Jersey, Guernsey and the Isle of Man. I understand that the Minister is here under the auspices of the FCDO, and they fall under the Ministry of Justice, but I hope that the Labour Government will very quickly look hard at applying the same UK standards to those Crown dependencies.

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[The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)]

I thank all right hon. and hon. Members, and particularly my hon. Friend the Member for Bolton West (Phil Brickell), for this well-informed and genuinely passionate debate. I have listened with great interest to a number of the examples that they raised. As he and others acknowledged, this issue is a personal priority for me, the Foreign Secretary, the Deputy Prime Minister and the Government as a whole. We must ensure the greatest standards of transparency, tackle illicit finance and tackle global corruption.

Members referred to our plans for the illicit finance summit next year, which I am working on closely with ministerial colleagues, and the anti-corruption strategy, which I have been working on closely with colleagues in the Home Office, the Treasury and elsewhere. We hope to present that strategy before the end of the year, and I hope that it will allay many of the broad concerns that have been raised by Members. I also pay tribute to Baroness Hodge for her incredible work as our anti-corruption champion. She has worked on these issues for many years, and I had the pleasure of working on them with her, but she is an independent voice, a challenge to the Government and a partner. She genuinely wants to find constructive solutions, and that has very much been the tenor of her work in the role so far.

I acknowledge the nuance in the contributions of right hon. and hon. Members on the subject of our overseas territories family and our wider British family. They recognised that substantial progress has been made in a number of them, that there are challenges in others and that not all overseas territories are heavily involved in financial services—in fact, some are barely involved at all. Some substantial progress has been made by the Government as a result of pressure and questioning not only from Members of this House but from the overseas territories, the wider NGO media and the global community. They want to see transparency and action against corruption and illicit finance for the purposes that were set out clearly by my hon. Friend the Member for Bolton West, as well as by many other right hon. and hon. Members.

Many Members drew connections between their constituencies, the priorities of the UK Government and the priorities of the Governments in the overseas territories. It is important to remember that lack of transparency, reputational damage, and the activities of very problematic individuals and serious and organised crime gangs, including sanctioned individuals, do damage not only in our constituencies but in the overseas territories. As the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) pointed out, that also does damage elsewhere in the world, particularly in the global south, Africa and other locations that, as he knows, I share his passion for.

My hon. Friend the Member for Bolton West set out very clearly how this problem impacts growth, housing and property, security and national security, and our national standing. That is why it matters, and that is why I know that this debate will not go away. The elected leaders in the overseas territories and their Governments will have heard clearly the strength of cross-party feeling, although I note with interest the absence of one party in this Chamber. I will leave Members to make their own minds up about that, but those Governments will see the strength of cross-party desire for action.

I am glad to say that we are taking an approach of co-operation and collaboration with our overseas territories. It is important to remind all Members of the constitutional relationship with our overseas territories. The Government and I respect their autonomy, decision making and elected Governments. They have extraordinarily robust debates in their own countries, and it is absolutely right that they should do so. I have set out my respect for them and my principles about working with them in partnership, and that will be reflected in the Joint Ministerial Council. Of course, the nature of the relationship with the Crown dependencies is distinct, and is for colleagues in the Ministry of Justice, Home Office and elsewhere to respond to, although I note the strong comments made on progress in the CDs.

It is also true that with our respect for their rights, the constitutional settlement and their autonomy, which I want to empower and strengthen, come responsibilities for overseas territories as part of the British family—responsibilities not only to the global rules-based order and the highest standards of financial transparency, but to their own populations and citizens. Hon. Members have made that point very clear.

Work in this area is vital. Illicit finance, corruption and kleptocracy are not abstract threats; they are direct challenges to our national security, our economy and the integrity of the global financial system. As has rightly been pointed out, these practices make it easier for criminal gangs to operate, undermine economies, make it easier to break sanctions and weaken the rule of law. The Government are leading the way when it comes to confronting these challenges, safeguarding our security and promoting integrity across the global financial system.

I was glad that hon. Members pointed out the excellent work on sanctions co-operation, including with the Cayman Islands. I had a chance to compliment the Cayman Islands on work on Operation Hektor on a recent visit there. We have also done excellent work with the British Virgin Islands, where our authorities have worked together on sanctions enforcement, and resource has gone into that. For all that to work effectively, of course, there needs to be transparency, because we cannot see what is really happening without understanding who owns what, where and how.

[Sir Andrew Mitchell]

Of course, the Minister is right about transparency—sunlight is the best disinfectant—but may I just pin him down on one point? He is heavy on collaboration and trying to get agreement, and he is right about that, but let us be absolutely clear that the constitutional relationship with the overseas territories and Crown dependencies is that Britain and Parliament are responsible for security issues and foreign affairs. These are security issues, and they relate directly to foreign matters. If the overseas territories do not agree to accept the will of Parliament, the Minister must make it clear to them that the Westminster Government will act via an Order in Council. That is not a voluntary thing; it is our duty. That is the nature of the constitutional arrangement, and the very clear legal opinion that Baroness Hodge and I secured underlines the point.

[Stephen Doughty]

The right hon. Gentleman is right about the legal and constitutional position. My position is that I want to work very closely and co-operatively, and that approach has succeeded in producing very welcome progress over the past year and a half. That is the way that I always try to approach our relationship with our friends in the overseas territories and the wider family. However, he is absolutely right, and the strength of feeling today should leave nobody in any doubt about the wider impact of the challenge and the concern, among many right hon. and hon. Members, about its direct impact in their communities. As I said, this is about the direct impact on citizens in the overseas territories themselves, as well as in the wider world.

I do not rule out any option in the future, but I hope that at first we can keep to and deliver on the commitments that were made at the Joint Ministerial Council last year. Some of those have been met; some have not. I have been very candid about that with the current president of the UK Overseas Territories Association, and have had very direct conversations with Premiers and others.

My hon. Friend the Member for Bolton West asked three specific questions. He asked about a visit with Baroness Hodge. I do not want to divulge our personal conversations, but he can be absolutely sure that we have met to discuss her findings, which she shared in great candour, as one would expect. I will take those on board. My expectation is that we will discuss this matter at the Joint Ministerial Council. The Premiers and elected representatives understand our position. Our expectation on fully public registers of beneficial ownership has not changed; nor has our expectation about the functioning of legitimate interest access registers in the meantime. I can assure my hon. Friend and others that we are engaging in forensic detail on how each of those works. For example, I had constructive conversations with the Premier of the Cayman Islands on my recent visit about the progress that it is making, and I expect further improvements in the months to come.

We follow these matters extremely closely and offer technical support and other advice on how we can work together co-operatively to deliver the most effective registers. For a register to be in place, with the necessary legislation, is all well and good, but if it does not function effectively because of fees or other barriers to its usability in practice, that is a serious concern. Obviously, there are territories that are yet to introduce such steps; the BVI, in particular, was mentioned.

My hon. Friend the Member for Bolton West asked whether I would meet his colleague from the AUGB and I would be happy to do that. The links to Ukraine that many right hon. and hon. Members mentioned are examples of why this matters. The Government’s recent action on Cambodian scam centres was mentioned. That was a shocking scam involving fraud against our constituents up and down this country, which involved property in London and involved a UK overseas territory, the BVI. I know the Premier of the BVI shares our concern about tackling that type of activity. It is in all our interests that we have the transparency to enable more of these scams—more of this shocking activity—to be exposed.

Many links were made to property, including by my hon. Friend the Member for Kensington and Bayswater (Joe Powell). I have seen examples in my own constituency of Cardiff South and Penarth, where residents faced with issues relating to fire and building safety have been unable to work out the original beneficial owners of large apartment buildings so that they can take appropriate action to ensure the safety of the buildings and their residents. Such issues impact every aspect of all our daily lives, including, as I said, in the overseas territories.

The BVI was mentioned extensively, so I want to be clear that the Government recognise some of the challenges. In August, a vessel owned by a BVI-registered entity transferred 2 million barrels of Iranian oil, which was delivered to China. Also this year, BVI-registered entities were discovered in the corporate chains of at least three sanctioned Russian oligarchs who own £35 million-worth of UK property, undoubtedly some of it in constituencies represented in this room. BVI-registered entities accounted for over 90% of identified suspicious funds invested through OTs into UK property between 2016 and 2024. We also have the challenge of inactive or dissolved BVI companies owning UK property. That creates substantial legal challenges around bona vacantia and ownerless assets, which many of us will have encountered in our constituencies.

As was rightly pointed out, in the three decades to 2018 more than 1,100 BVI-registered companies featured in corruption cases around the world. I know the seriousness with which the Premier and the Government there take these issues. I want to work with them in addressing them, because they impact all of us and they impact the BVI’s reputation, but to do that we need transparency and progress.

Colleagues made many important contributions and I will not be able to respond to them all in the time I have today, but I note the serious concerns about Mr Abramovich raised by my hon. Friend the Member for St Helens South and Whiston (Ms Rimmer). I am not able to comment on individual tax matters at the Dispatch Box, but we remain committed to ensuring that the proceeds of the sale of Chelsea reach humanitarian causes in Ukraine. We are deeply frustrated that it has not yet been possible to reach an agreement with Mr Abramovich and his representatives. The door for negotiations remains open, but we are fully prepared to pursue the matter through the courts if required, as we have said on a number of occasions recently.

Important points were raised, including by my hon. Friend the Member for Salford (Rebecca Long Bailey), about HMRC. I am sure she will be able to raise her points with the relevant Ministers, but what she said about why transparency principles matter was very powerful. My hon. Friend the Member for Bournemouth East (Tom Hayes) spoke powerfully about the impact on public services, on housing and on the high street, and about the challenges for our constituents. We have touched on all those points of nexus during the debate.

Financial secrecy is the oxygen that allows illicit finance to thrive and sanctions breaches to go undetected; it creates blind spots. It is, of course, a transnational problem. Dirty money pushes up property prices, making it harder for people to buy homes. Overseas corruption and illicit finance undermine economies, prop up kleptocratic regimes and threaten democracy. As the right hon. Member for Sutton Coldfield made clear, it is estimated that African countries alone lose around $90 billion a year in illicit capital flows. That is more than they receive in development assistance.