Offshore havens' opacity undermines UK transparency drive on beneficial ownership

Britain's offshore territories have technically complied with demands for corporate transparency. The Cayman Islands, the British Virgin Islands, and crown dependencies like Jersey and Guernsey all now maintain registers of beneficial ownership—records that theoretically reveal who actually owns companies in these financial havens. But in practice, accessing this information has become so arduous, expensive, and uncertain that critics argue the registers function more as a facade than a tool.

Consider what it takes to find out who owns a company in the Cayman Islands. You must first establish a "legitimate interest" by proving you are a researcher, journalist, civil society representative, or someone considering a business transaction. You then submit a lengthy form explaining precisely how the information will be used to combat money laundering or terrorist financing. There is a fee of at least $75 per application, payable only by international wire transfer—no online payment option. After submission, you wait. The subject of your inquiry can meanwhile pay $1,000 for a three-year "protection from disclosure" order, effectively blocking access on grounds that transparency might expose them to harm. The Cayman Islands government's guidelines permit exemptions for activities like animal testing that might attract activist attention. Even when exemptions are refused, the process drags on with no guaranteed timeline.

The British Virgin Islands system is worse in some respects. Officials there notify the subject of any inquiry—potentially alerting a sanctioned oligarch or drug trafficker that someone is asking questions about them. Steve Goodrich, head of research at Transparency International, described submitting a request three months earlier about a sanctioned Russian oligarch still holding millions in UK property through a BVI company. He was still waiting for a reply. Margaret Hodge, the government's anti-corruption champion, called the registers "sclerotic and unpredictable," saying they make a mockery of their stated purpose.

These barriers exist despite seven years of pressure from Westminster on overseas territories to embrace beneficial ownership transparency. The campaign intensified as real-world cases mounted: Cayman Islands entities featured centrally in the 1MDB scandal, one of history's largest corruption cases. Roman Abramovich secretly funded Chelsea FC through BVI companies. The BVI was the jurisdiction most frequently used in the Pandora Papers leak. By early this year, all overseas territories had nominally introduced "Legitimate Interest Access Registers"—Liarbos, as transparency advocates wryly note. But Stephen Abbott Pugh of Open Ownership concluded they are "too costly, too complicated and takes too long to access," leaving crucial information "locked away in most cases."

The Cayman Islands defended itself by noting only 25 applications had arrived in 19 months, framing this as evidence of low demand rather than systemic barriers. A spokesperson rejected criticism of the register's complexity and cost, asserting that "no credible evidence has ever been presented that Cayman has a problem with illicit finance"—a claim that sits uneasily against the documented cases of major corruption flowing through these jurisdictions.

Tension between London and the offshore territories has simmered and occasionally boiled over. Hodge was dispatched to the BVI on what officials called a fact-finding mission but appeared to many as a warning shot. When MPs Phil Brickell and Joe Powell criticized the BVI's transparency record, a local media outlet published a cartoon depicting them kicking a corporate transparency mascot—a parakeet named Riley Right. Powell stated bluntly that full public access to ownership records is the only way to expose dirty money flowing through British territories. Brickell warned that the UK government will host a summit on countering illicit finance in December, and failure to get "our own house in order" by then would be "an acute embarrassment."

Hodge has indicated Westminster could force crown dependencies to improve transparency, though Guernsey's leadership responded by invoking "outdated prejudices" about the island. Hodge fears the crown dependencies are using a prolonged EU dispute over corporate registers as cover for inaction. With a new government in place under Andy Burnham, she expressed hope for a more effective approach. The offshore territories maintain that tax and criminal authorities already have full access to beneficial ownership data, and that their regimes align with international standards. But for journalists, researchers, and civil society groups trying to follow the money, the registers remain largely closed.