Cash ruling angers overseas territories

BRITAIN has prompted a furious backlash from its overseas territories after announcing they will be forced to mount a transparency crackdown in an attempt to stem the flow of “dirty money”.

The Government said it would not oppose a cross-party amendment requiring tax havens such as the British Virgin Islands and the Cayman Islands to introduce public ownership registers.

It was forced drop its opposition after up to 20 Tory rebels said they would support the amendment, which was also backed by Labour, the Scottish National Party and the Liberal Democrats.

The amendment requires Britain to ensure that overseas territories establish publicly accessible registers of the “beneficial ownership” of companies. MPS and campaigners say public registers will make it easier to uncover moneylaundering, tax-dodging and corruption.

Ministers had opposed the move amid concerns that the Government could not impose its will on overseas territories.

Sir Alan Duncan, a Foreign Office minister, told the Commons: “We do not want to legislate directly for them, nor do we want to risk damaging our long-standing constitutional arrangements which respect their autonomy.

“However, we’ve listened to the strength of feeling in this House on this issue and accept that it is the majority view of this House that the overseas territories should have public registers ahead of it becoming the international standard, as set by the Financial Action Task Force.”

However, Orlando Smith, the president of the British Virgin Islands, described the crackdown as a “breach of trust”, adding that he was “deeply disturbed”. He stopped short, however, of directly calling for independence.

Overseas territories fear the policy will damage their economies, already struggling after a series of devastating hurricanes.

He said: “This is a deeply flawed policy. It is not only a breach of trust but calls into question our very relationship with the UK and the constitutional rights of the people of the BVI. We will ensure that this constitutional overreach does not set a precedent and that the rights of the people whom I represent are respected.”

Andrew Mitchell, a former Tory Cabinet minister who jointly tabled the amendment, said: “The overseas territories share our freedom. They travel under our flag, and they should also share our values.”

Geoffrey Cox, a Tory MP, said ministers had pledged to the Cayman Islands in 2009 not to interfere in their domestic legislation.

“By this measure today, we are breaking that promise and it is beneath the dignity of this Parliament to do away with that promise and pledge of good faith,” he said.

Rebecca Gowland, of Oxfam, said: “This is great news for the world’s poorest people. Ending secrecy in Uk-linked tax havens will help developing countries recoup billions of lost revenue.”