Press release 29th Apr 2022

Corruption inquiry exposes endemic issues in British Virgin Islands

29 April, 2022 – Transparency International UK welcomes the publication of the findings of an inquiry into corruption in the British Virgin Islands (BVI). The report exposes endemic problems in the territory’s governance and recommends a temporary return to direct rule from London.

The inquiry began in 2021 to investigate "the corruption, abuse of office, and other serious dishonesty". Publication of the findings was expedited after BVI Premier Andrew Fahie was this week arrested in the US on allegations of drug trafficking and money laundering.

Transparency International UK’s research has found the BVI has long been a destination of choice for those with money to hide. We found 1,201 companies from Britain’s Overseas Territories alleged to have been used in 237 large scale corruption and money laundering cases. Of the 1,201 entities identified, 1,107 (92 per cent) were registered in the BVI.

Regardless of what happens next in the BVI, Transparency International UK is calling on the UK Government to negotiate full, open access to company registers in the Overseas Territories and Crown Dependencies (CDOTs) to prevent sanctions evasion, and for public company ownership registers to be implemented this year.

 

Daniel Bruce, Chief Executive of Transparency International UK, said:

“The report’s findings are deeply troubling and expose widespread problems with corruption and dishonesty throughout the government of the British Virgin Islands. That the inquiry has concluded the only way to begin fixing these issues is a return to direct rule from London speaks volumes about how endemic the problems are. Citizens of every country deserve elected representatives and officials that act with integrity and in the public interest, not those who use their office to enrich themselves.

“Research consistently shows that financial centres in Britain’s Overseas Territories are outsized players in global corruption and money laundering schemes. The British Virgin Islands in particular has become the destination of choice for the corrupt and other criminals to hide and launder their ill-gotten gains. We continue to call on the UK Government to ensure public beneficial ownership registers are established in each of Britain’s offshore financial centres this year.”

 

Transparency International UK is recommending the UK government:

 

1. Ensure anonymous companies registered in the UK’s offshore financial centres are not being used to evade UK sanctions by requesting full access for UK authorities to registers of beneficial ownership in the CDOTs until public registers are in place.

Currently, access to a company’s registration information in the CDOTs is granted by individual request rather than full, open access to central company registers. This includes the British Virgin Islands’ Beneficial Ownership Secure Search (BOSS) System. The UK government should consider a new Exchange of Notes with the CDOTs to provide UK authorities with total access to company information registers until public registers are put in place.

2. Do everything in its power to ensure the CDOTs open their company registers to public scrutiny this year.

Under the Sanctions and Money Laundering Act 2018, the UK Government was required to draft an Order in Council requiring the Overseas Territories to open up their company registers. It has published a draft, noting it expects these registers to be in place by the end of 2023. It is not clear how accessible these registers will be, but to provide maximum transparency, the UK government should push for a system that is online and free to use.