British Virgin Islands: Illicit Finance

25 Feb

Question

Content Analysis: The session focused on assessing the British Virgin Islands' (BVI) steps towards combating illicit finance, specifically regarding the establishment of a register of beneficial ownership. Lloyd Hatton emphasized concerns about the BVI's current proposal, which limited access to such registers, opposing the need for transparency in tracing financial activities. Mr. Lammy reiterated the Government's stance on ensuring a transparent system and highlighted ongoing consultations and meetings aimed at refining BVI’s plans. Mr. Andrew Mitchell addressed legal obligations under the Sanctions and Anti-Money Laundering Act 2018, which mandated such registers by 2020, criticizing BVI's delay.

Significant Contributions:

Lloyd Hatton's Inquiry: Focused on accountability and pushed for measures ensuring a transparent register of beneficial ownership.
Mr. Lammy's Responses: Reiterated commitment towards implementing public access to BVI's registers via diplomatic dialogues and consultations.
Mr. Andrew Mitchell's Criticism: Highlighted BVI's non-compliance with legal timeframes and demanded governmental action.

June 2025

Timeline for the BVI to implement corporate registers accessible to legitimate parties.

Outcome: The session underscored the UK's firm stance on fiscal transparency and combative action against illicit finance. It flagged upcoming meetings and consultations as decisive moments for the BVI to align with international standards under UK guidance.

June (Year unspecified)

Original commitment from the BVI for improving register access.

Statistics and Context:

Deadline Delayed: Original 2020 deadline for open registers set by the Sanctions and Anti-Money Laundering Act 2018, still unmet.
Current Timeline: BVI's public consultation on corporate registers set to close, with aims for improvement by June 2025.

2020

Mandated deadline for open registers per the Sanctions and Anti-Money Laundering Act 2018.

Outcome

The UK Government affirmed its commitment to ensuring the BVI adhere to fiscal transparency commitments but acknowledged the need for diplomatic engagement to encourage compliance. The session closed without a definitive deadline for resolution but highlighted impending governmental consultations as a path forward.

Key Contributions

Lloyd Hatton

Labour

Questioned the effectiveness of BVI's steps towards combating illicit finance.

Mr Lammy

Reaffirmed UK's diplomatic efforts in ensuring BVI's compliance with international standards.

Mr Andrew Mitchell

Conservative

Criticized BVI's non-compliance with the 2020 deadline set by Sanctions and Anti-Money Laundering Act.

Original Transcript

Lloyd Hatton

South Dorset

Lab

Question

UIN: 902802

3. What assessment he has made of the effectiveness of steps taken by the British Virgin Islands to tackle illicit finance.

The Secretary of State for Foreign, Commonwealth and Development Affairs

Mr David Lammy

The overseas territories, including the British Virgin Islands, work to uphold international standards on tax transparency and illicit finance and enforce UK sanctions.

The overseas territories agreed to implement corporate registers that are accessible at least to those with legitimate interest by June 2025. We are aware of BVI’s public consultation on its register and are working with it to improve its proposal.

Lloyd Hatton

11:45

The BVI will soon close the consultation on its proposal to grant only limited access to a register of beneficial ownership.

That proposal means that it will be virtually impossible for even a select few to trace those using the BVI as a place to secretly stash their cash, and this comes some five years after the first deadline to set up a register was missed.

I know that the Secretary of State agrees that sunlight is the best disinfectant when it comes to combating illicit finance, so what steps is he taking to ensure that the BVI establishes a genuine and fully transparent register of beneficial ownership?

Mr Lammy

11:45

The BVI committed at the Joint Ministerial Council to improving access to its corporate register by June. I met BVI representatives just after that time at the end of last year, and my hon. Friend the Minister of State will meet the BVI again in the coming weeks.

It is important that that public consultation on the proposed register will close this Friday, and we are working with the BVI to improve its proposal.

Mr Andrew Mitchell

Sutton Coldfield

Con

The Foreign Secretary will be aware that under the Sanctions and Anti-Money Laundering Act 2018, the British Virgin Islands is obliged to introduce open registers of beneficial ownership by the end of 2020, or be subject to an Order in Council.

It has not done so, it is in contempt of Parliament, so when will the Foreign Secretary issue the Order in Council?

Mr Lammy

I say to the right hon. Gentleman that if the agreed requirements are not met we will carefully consider what further steps to take. Our expectation remains clear: those registers will ultimately be public, and my hon. Friend the Minister of State will meet the BVI to make clear our expectations.

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