Critics say ownership registers are too costly and too complicated, scuppering attempts to expose alleged money laundering.
Since Britain's offshore secrecy jurisdictions gave in to pressure from Westminster to embrace corporate transparency, finding out who owns a company in one of these island havens is, in theory, straightforward. Take the Cayman Islands. You must show you have a "legitimate interest" in the data by proving you are a researcher, journalist, a member of a civil society group, or a business person considering a transaction with the subject of your inquiry. Then you must explain how the information will be used for "preventing, detecting, investigating, combating or prosecution money laundering or its predicate offences or terrorist financing". There is a fee of at least $75 (£55) per application. Until recently, this could only be done via an international wire transfer, although card payments are now available. Next, fill out a lengthy form outlining exactly what information you want, cross your fingers and wait. It is not exactly Companies House, for all its faults.
Even after the form is submitted, the subject of the inquiry can apply for a three-year "protection from disclosure" at a cost of $1,000 to stop the information being sent, on the basis that corporate transparency could expose them to harm. These applications are refused more often than not, a Cayman Islands spokesperson said, but justifications for exemption appear to be drawn quite widely. Reasons could include revealing any connections to "activity such as testing products on animals, which might lead to them being targeted by activists", according to guidelines written by the Cayman Islands government. This is not an uncommon precaution. It is also available in the UK for a fee of £100.
Transparency campaigners believe aspects of the system in the British Virgin Islands (BVI) are even worse. There, officials will inform the subject of any inquiry, perhaps a powerful oligarch or a narco-trafficker, of the name of any organisation asking the inconvenient questions, though not the names of individuals. Don't expect a quick outcome either. "Three months ago we asked whether a sanctioned Russian oligarch still owns a company holding millions worth of UK property," said Steve Goodrich, the head of research and investigations at the anti-corruption campaign group Transparency International. "We still haven't had a reply." Margaret Hodge, the veteran anti-corruption campaigner, said that the sclerotic and unpredictable nature of these corporate registries "makes a mockery of their purpose".
Legitimate interest access registers of beneficial ownership, or Liarbos for fans of ironic acronyms, have come about after a seven-year campaign by the UK government to bring overseas territories, and crown dependencies such as Jersey and Guernsey, to heel. The campaign has gathered steam amid mounting real-world examples of how Britain's offshore havens had been used to launder money, avoid taxes or otherwise flout laws or other norms, such as the financial rules governing football. Cayman Islands entities played a central role in the 1MDB scandal, one of the largest corruption cases in history. The Russian oligarch Roman Abramovich secretly funded Chelsea FC with cash funnelled through companies in the BVI, a Guardian investigation revealed last year.
