Financial Transparency: Overseas Territories

Joe Powell Excerpts

Wednesday 5th November 2025 Westminster Hall

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

I congratulate my hon. Friend on securing the debate. Does he agree with the National Crime Agency that if it had open and accurate data on who owned and controlled those businesses, its operations would be much more effective? Those businesses are often linked to overseas territories, so the National Crime Agency cannot find their real owners and crack down on them.

[Phil Brickell]

I thank my hon. Friend for his passionate campaigning on this issue. He is absolutely right that we need more transparency to support our law enforcement agencies to tackle this issue, and I will come on to that now.

I pay tribute to the brilliant enforcement work undertaken by the National Crime Agency through its Operation Machinize. Just last week, police visited a number of addresses in my constituency, seizing £17,000-worth of goods in the process. I applaud the work of our enforcement agencies, but as I will explain, these tireless professionals need more support in their work.

Elsewhere, financial murkiness causes friction for British businesses. When I worked in finance, we would often conduct “know your customer” checks and hit a wall, because a trust or a corporate service provider was incorporated in a secrecy jurisdiction. The beneficial owner was always elsewhere. Every time we spoke to law enforcement, journalists or civil society about dirty money, the same names came up: the BVI, the Cayman Islands and Bermuda. It is farcical.

Banks, lawyers and accountants are on the frontline of anti-money laundering checks. Collectively, they spend over £38 billion a year on financial crime prevention—the equivalent of £21,000 every hour. A good-quality public register of beneficial ownership would make their work cheaper, faster and, frankly, more effective, unlocking the growth potential of our world-leading financial services sector.

On national security, since Russia’s barbaric invasion of Ukraine, the UK has quite rightly been at the forefront of the global sanctions regime against Putin. I commend the Minister for his personal leadership in ensuring that it is Putin and his cronies who pay for their unlawful war. The overseas territories have played an important role in enforcing those sanctions, freezing over £7 billion in Russia-linked assets. Indeed, initiatives like the Cayman Islands’ Operation Hektor, which has frozen £6 million of assets, deserve recognition.

Enforcement is only as strong as the weakest link. If opaque corporate structures allow sanctioned individuals to move assets through nominee companies, the whole system is undermined. That is why full beneficial ownership transparency is not a bureaucratic nicety; it is a national security measure. Opponents will say that UK law enforcement agencies have access to this information, but many agencies are critically underfunded and simply do not have the capacity to keep up the bewildering game of whack-a-mole that they play with bad faith actors.

Transparency International UK has identified around £700 million-worth of UK property linked to sanctioned Russian oligarchs that went unflagged in the UK’s register of overseas entities in 2022. Among them is a vast Hampstead estate valued at up to £300 million, reportedly owned by Russian chemicals magnate Andrey Guryev. Reports suggest the property was originally acquired using a company based in—you guessed it—the British Virgin Islands. I asked my friend Yaroslaw Tymchyshyn, chair of the Bolton branch of the Association of Ukrainians in Great Britain how he felt about this. He said:

“The government needs to seize all Russian assets which should be used to fund the Ukrainian war effort. It irks us that the oligarchs are living the high life in the west, whilst the Russians continue to bomb and use drones to kill civilians, including children.”

What should I say to him?

Elsewhere, the Office of Financial Sanctions Implementation has reported that since February 2022 more than a quarter of suspected sanctions breaches have involved intermediary jurisdictions, including the BVI and Guernsey. This level of financial secrecy allows sanctioned elites and hostile actors to hide their wealth, undermining Britain’s sanctions regime and weakening our ability to deter aggression. When dirty money flows unchecked through our financial system, it erodes the credibility of our foreign policy, drives up the cost of energy and food, and ultimately fuels Putin’s brutal war in Ukraine.

In addition, criminal gangs involved in drug smuggling, people trafficking or protection rackets need to launder their ill-gotten gains into the regular economy. The financial secrecy afforded by the overseas territories gives the perfect cover to dodgy accountants, lawyers and corporate service providers. Edin “Tito” Gačanin, a Dutch passport holder but a Bosnia and Herzegovina native, was convicted last year of trafficking drugs from South America into Europe. It has been alleged that Gačanin is connected to the infamous Kinahan cartel, one of Europe’s most notorious organised crime gangs. As reported by the BBC, that cartel has flooded UK streets with drugs and guns over two decades. According to an investigation by The Times, in order to avoid US sanctions, the Kinahans recently sought anonymity using jurisdictions such as the Cayman Islands, the BVI and the Isle of Man.

Even organised fraud finds shelter in the overseas territories. Just last month, the Foreign Secretary rightly announced sanctions on a global scam network led by Cambodian citizen Chen Zhi, who allegedly used BVI companies to launder profits. Those profits were reportedly routed into a £12 million mansion in north London, a £100 million City office block and a string of luxury flats, while victims across the world were left penniless. Even when the authorities do catch fraudsters, financial secrecy in our offshore territories inhibits our ability to hold criminals to account.

Covid fraudster Gerald Smith was prosecuted by the Serious Fraud Office, but tried to use a BVI company to obstruct the seizure of a flat he owned to avoid paying compensation, resulting in a direct loss to the taxpayer. He still owes £82 million—and he is not alone. Just this summer the SFO told the all-party parliamentary group on anti-corruption and responsible tax, which I chair, that 25% of all cases that it is currently investigating have links to the overseas territories.

A final point on national security: I am gravely concerned that secrecy jurisdictions open a back door into our politics. The FinCEN files reveal that in 2016 the husband of Lubov Chernukhin received more than £6 million from Suleiman Kerimov, who was sanctioned in 2022 by the UK for his connections to Putin. Kerimov used a BVI company to conceal that payment. Lubov Chernukhin has donated more than £2 million to the Conservative party since 2012.

I have additional concerns about the Electoral Commission’s capacity to keep up with cryptocurrency donations, which Reform has reportedly already begun accepting. Indeed, the crypto platform Zebec sponsored a panel at Reform’s party conference on “Strengthening the Rule of Law: legislative reform?”. Zebec is, unsurprisingly, ultimately controlled by an entity registered in the British Virgin Islands, as reported by The Observer. Protecting our democracy from foreign interference is made all the more difficult by crypto firms involving themselves in our politics while hiding behind the veil of corporate secrecy, enabled by our overseas territories.

We come on to international leadership. Financial secrecy in jurisdictions under the Union flag does not just damage our economy; it damages our credibility. The UK rightly prides itself on being a global leader in the fight against economic crime. We have made real progress with the Economic Crime (Transparency and Enforcement) Act 2022, the Economic Crime and Corporate Transparency Act 2023 and the register of overseas entities, by boosting the powers of Companies House, and with the Treasury’s recent welcome announcement on reforming our anti-money laundering framework.

Next year, when the UK hosts the countering illicit finance summit, the Government will have a chance to show further leadership, but the UK cannot credibly call on others to improve transparency if the jurisdictions flying our flag lag behind on beneficial ownership. Our diplomats work tirelessly to promote British values overseas—the rule of law, fair competition and integrity in public life—yet, when investigative journalists, non-governmental organisations or foreign Governments look into global corruption cases, the trail often runs through a British overseas territory. That damages us and weakens our hand in international negotiations, giving cover to regimes that would keep their elites’ wealth hidden.

What needs to happen? In 2018, MPs led by the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) and the Government’s anti-corruption champion, Baroness Hodge, successfully secured an amendment to the Sanctions and Anti-Money Laundering Act 2018. I pay tribute to them for their tenacious campaigning over many years. Their amendment required all overseas territories to introduce registers of beneficial ownership by 2020. That deadline slipped to 2023, and then to 2025—another deadline that was largely missed.

The UK’s overseas territories are a valued and integral part of our British family. Their ties to us are deep, and their prosperity is something we rightly cherish. They are our partners in defence, trade and increasingly in tackling the great global challenges of our age: climate change, migration and the rule of law. But being family means being honest, and I am afraid to say that certain jurisdictions have not covered themselves in glory by obfuscating, delaying, ignoring and frustrating the will of this Parliament. It is not acceptable. Missing deadlines sends a “terrible message” to the world, according to the current Deputy Prime Minister, in response to a question I asked him earlier this year when he was before the Foreign Affairs Committee.

This speech is not lazily tarring all overseas territories with the same brush. Far from it: Gibraltar, Montserrat and St Helena have delivered and deserve praise. The Falkland Islands are on track to implement by mid-2026 and are engaging constructively with the UK Government. Bermuda has made positive noises, although there is still room for improvement in its recent statement on next steps under its Beneficial Ownership Act 2025.

Elsewhere progress has been slow and patchy. The British Virgin Islands, in particular, remain a serious concern. Transparency International UK has warned that the British Virgin Islands’ proposed company register framework is not compatible with global transparency standards, with journalists being granted information on only a subset of data, rather than the beneficial ownership that they record, even baking in a tip-off for people being investigated, giving them a chance to object to their information being shared with a journalist. The Cayman Islands have also been slow to move from consultation to implementation. Although some good work has been done, substantial areas remain, including exorbitant costs and an unreasonably high threshold for granting applications from civil society and journalists.

The fact remains that some of the largest financial centres under the British flag are still operating secretive structures that enable tax evasion, sanctions evasion and kleptocracy. Occasionally, capacity restraints are cited. The UK Government rightly have an obligation to step in and provide technical support. There is also a suggestion that some jurisdictions do not want to fulfil their promises, lest they lose their competitive advantage.

To those naysayers, I say that the UK has an obligation to help its overseas territories to diversify their economies. It can be done, as in the case of the Isle of Man, where considerable work is under way to invest in offshore wind. Let me be clear: transparency has not hindered economies elsewhere. The UK has had a fully public register for years, and the sky has not fallen in. Research commissioned by the UK Government estimated that corporate transparency reforms produce data worth up to £3 billion to the public and private sectors. Look at Gibraltar, which has continued to grow, driven by insurance, gaming and fintech, even after introducing full beneficial ownership transparency.

I have a number of asks of the Minister. Last month, the Prime Minister’s anti-corruption champion, Baroness Margaret Hodge, visited the BVI to understand what progress it is making towards fully open registers of beneficial ownership. What update can the Minister give us on that visit? With November’s Joint Ministerial Council rapidly approaching, will he remind those overseas territories that continue to delay the implementation of publicly accessible registers of beneficial ownership, with the maximum possible degree of access and transparency as per last year’s joint communiqué, of their commitment?

Concerningly, the 2024 JMC communiqué contained the following line:

“We note the UK Government’s ambition that Publicly Accessible Registers of Beneficial Ownership (PARBOs) become a global norm and its expectation that Overseas Territories and Crown Dependencies implement full PARBOs.”

Will the Minister confirm that the overseas territories and the Crown dependencies are still expected by His Majesty’s Government to implement fully public corporate registers? If legitimate-interest access filters are an interim step, what assurances can he give me that journalists, civil society organisations and others with a genuine interest will have open and repeated access to company data in the overseas territories? Finally, will the Minister meet me and Yaroslaw from the Bolton branch of the Association of Ukrainians in Great Britain to reassure him that the Government are doing all they can to bring an end to Putin’s barbaric war in Ukraine, including by enforcing economic sanctions in the OTs?

My speech does not seek to undermine the important constitutional relationship between the overseas territories and the UK. I welcome, for example, the £7.5 million recently provided by the UK to Commonwealth member Jamaica after Hurricane Melissa, alongside $1.2 million from the Cayman Islands. But partnership brings mutual obligations, which must include the shared commitment we have all made to openness, integrity and accountability, because every pound laundered through a BVI shell company and every mansion bought with stolen public funds is a stain on our national integrity.

Cleaning up this system is not just an act of international justice; it is a patriotic duty. We cannot build clean foundations for growth while our financial system remains a refuge for dirty money. Public, accessible and verifiable registers of beneficial ownership are not a burden; they are our competitive advantage. They enable cheaper due diligence for firms and cleaner supply chains for investors, they protect small businesses by making procurement fairer and fraud harder, they strengthen our economy by rooting out corruption before it takes hold, and they give the British people confidence that when they pay their taxes, buy a home or open a small shop on the high street, the system is fair and honest.

The autumn Budget is scheduled for 26 November. After her Budget speech, tradition dictates that the Chancellor will go to the Two Chairmen for a well-earned gin and tonic. That pub, which I hasten to add is not accused of any wrongdoing, is owned via the Isle of Man and leased to Greene King, which is itself owned via the Cayman Islands. I think that encapsulates just how out of hand the shadow financial system has become.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Mr Twigg. I thank the hon. Member for Bolton West (Phil Brickell) for leading today’s debate with such a detailed, informative speech. We are all impressed by the way he set the scene.

This United Kingdom is made up of four countries that are directly impacted by public finances in how we can distribute allocated money and what we have the capacity to deal with, so this debate is important. There is already a strain on public finance; we all witness it every day. We see our public Departments struggling, especially health and education. Whether it is here or back home, the issues are the same. We must also note that the Chancellor has not yet ruled out tax rises ahead of the Budget. The public are already taking on the burden of the UK’s debt.

We have seen, and the Government are aware of, countless instances of tax evasion and avoidance by people in the United Kingdom, especially in the jurisdiction of the Cayman Islands. That contributes to lost tax revenues across the country. My issue is the loss of tax revenue—money that should be spent in this country on our own people. The UK Treasury loses billions each year to offshore tax avoidance. Northern Ireland relies on the block grant from Westminster through the Barnett consequentials for our devolved Government, so this tax avoidance and evasion means less funding for crucial sectors in Northern Ireland such as health, education and infrastructure. That is frustrating for people. [Interruption.]

[Joe Powell]

Will the hon. Gentleman give way?

[Jim Shannon]

Just for a second; thank you.

[Joe Powell]

I thank the hon. Gentleman for joining the last debate we had on this topic in this Chamber seven months ago. Does he agree that the link we are discussing between the overseas territories and the sorts of criminal activity that we all see demonstrates that the British public would be on side with cleaning up this mess?

[Jim Shannon]

I thank the hon. Gentleman for giving me the chance to get my cough sorted; I appreciate that very much. I agree with him.

There is obvious unfairness in taxation, especially because citizens face higher scrutiny than wealthy users of offshore arrangements. For example, the average person will at some point in their life be hit with a tax bill—that dreaded letter that comes through saying, “You haven’t paid enough tax.” The same does not go for those who partake in tax avoidance. The Treasury should do more to ensure that such people pay into the system just the same as everybody else.

The UK’s register of overseas entities 2022 revealed that several properties in Northern Ireland were held via entities in secrecy jurisdictions—more evidence of offshore-linked ownership of commercial and residential assets, especially in Belfast. Such investments can inflate property value and cause confusion over true ownership of property. That has a great impact on the ordinary person.

My focus and my responsibility are my constituents and the money that they must lose from their wages each month to increase Government spending. There must be more clarity and better insight. Government must do more to reinstate trust with the public, because there is disillusionment when it comes to finance. The Minister is a good and honest man. I look to him for an acknowledgment that Northern Ireland and the devolved nations suffer as a result of this and that he will endeavour to do more for this country to protect finance and, ultimately, my constituents.

--- Later in debate ---

[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?