The territory’s secrecy rules have long attracted criminals and secretive companies created there have featured in several ICIJ investigations on offshore finance.
The British Virgin Islands, a popular tax haven where secrecy rules have long attracted criminals, will introduce a public register of owners of companies created on the island.
The BVI, an overseas territory of the United Kingdom located east of Puerto Rico, has a well-documented history of being misused by drug traffickers, corrupt politicians, and tax evaders. Successive scandals, including exposés by the International Consortium of Investigative Journalists, have placed the BVI under pressure to increase transparency.
Andrew Fahie, BVI’s premier and minister of finance, told the island’s House of Assembly in September that his government would work “towards a publicly accessible register of beneficial ownership for companies,” albeit “subject to reservations.” Liz Sugg, the U.K. minister with responsibility for territories like the BVI, later tweeted that the public register would be adopted by 2023.
“Every time that there’s a global exposé on illicit finance, the BVI’s name comes up,” said Ava Lee, anti-corruption campaign leader from the nonprofit Global Witness. “The recent leak of files from FinCEN showed that at least 20% of the occasions when banks in the US raised suspicions of money laundering involved BVI companies, and half the companies exposed by the Panama Papers were registered there.”
There is currently no simple way for members of the public, journalists, or lawyers to identify a BVI company’s owner.
Knowing a company’s owner can be key to determining whether laws have been broken and help trace money, homes or other assets in a divorce or other dispute. Countries and law enforcement can officially request information from the BVI. However, not all countries can make such requests and, even if they can, information can take significant time to arrive.
BVI, and secretive companies created there, have played an outsized role in major ICIJ investigations since 2014.
The BVI was the secrecy jurisdiction of choice for customers of the Panama-based law firm Mossack Fonseca, according to an ICIJ analysis of leaked files that formed the basis of the 2016 Panama Papers investigation. Mossack Fonseca created more than 113,000 BVI companies, outstripping Panama as the most popular tax haven.
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