As the UK co-hosts its Illicit Finance Dialogue in Miami this month with elected officials from the Overseas Territories, corporate transparency will be a major part of the discussion. Nearly eight years since these offshore financial centres committed to establish public registers of beneficial ownership - and ten months since the last deadline to provide access to those with a legitimate interest - where are we now?

Slow movement   

Momentum towards corporate transparency suffered a major setback in 2022, when a European Court of Justice ruling found that public registers of beneficial ownership solely aimed at tackling money laundering unduly interfered with privacy rights. Though the ruling only affected the EU directly, its impact has rippled across the world.  

Importantly, the ruling did not dismiss transparency outright. It recognised that certain users, including journalists and civil society, had a legitimate interest in beneficial ownership data when using it to investigate money laundering and associated crimes. It also suggested that limiting the policy purpose of such registers solely to anti-money laundering purposes may have been too narrow, contributing to the courts view that the infringement on privacy was disproportionate.  

In theory, this should have prompted governments to design registers that balance privacy with a broader set of public interest goals: improving procurement, strengthening competition, and ensuring value for money, alongside tackling financial crime.  This approach exists in the UK and aligns with Transparency International UK’s good practice guidelines for disclosure, published last year. In practice, many jurisdictions adopted a ‘derisking’ approach – taking registers offline or rolling back on previous transparency commitments.  

For the UK’s Overseas Territories, many of which were already reluctant to introduce public registers, the ruling has become a convenient justification to limit access to the information they hold.  

Public vs. Private  

A clear pattern has emerged. Territories with small trust and company service sectors -  Gibraltar, St Helena and Montserrat - have introduced public registers. Those with a large trust and company industry and a high dependency on it for public revenues - the British Virgin Islands, Cayman Islands or Bermuda - have opted for more restrictive systems that prioritise privacy rights. 

But whose privacy rights are being protected?  

Our research suggests that companies registered in the Overseas Territories have diverted £250 billion from 79 different countries. Ninety-two per cent of these entities were registered in the BVI. A recent investigation by Transparency International Russia found that £6 billion worth of trade out of Russia passed through companies in Britain’s offshore financial centres, with the BVI figuring prominently.  

Available evidence suggests some of these jurisdictions are wilfully blind of what their clients do, provided the criminality does not take place on their own shores. 

Legitimate interest: access in theory, obstruction in practice  

So, are legitimate users able to access this data?  

The short answer: very few.  

The BVI and Anguilla are expected to launch their registers today, while Bermuda has yet to announce a timeline. Only the Cayman Islands and Turks and Caicos operate live systems, offering an early indication of how legitimate interest models work in practice. What we have seen gives serious cause for concern. 

Delays: Most jurisdictions provide no clear timelines for processing requests. Journalists applying in the Cayman Islands have reported waiting months for a response. This far exceeds the 14-day benchmark in the EU.  

Highly restrictive access: Every legitimate interest register, live or planned, requires case-by-case assessment, with no ability for journalists to conduct open-ended searches on an individual’s name or a suspected company, as is provided for in EU law. This means users must already know what they are looking for, and most likely, already have a sense of who the beneficial owner is – making it impossible to use the register to access new information, rendering it useless to investigators. In contrast, the EU’s framework allows organisations investigating financial crime to access beneficial ownership data without demonstrating prior knowledge of the company or its owner, providing a far more effective tool for tackling financial crime.   

High evidentiary threshold: Some of our applications were rejected on the grounds that they did not include sufficient evidence of suspicion that the entity could be involved in money laundering. Journalists have reported spending an entire day preparing a single application for complex cases - unsustainable for investigative work at scale. Even when they have proven a legitimate interest in a line of enquiry, they have had to re-submit new evidence every time they want access to a connected company further up a chain of ownership. 

Inconsistent definitions of legitimate interest: In some jurisdictions, such as the Cayman Islands, applicants can apply for information if they have evidence linked to money laundering or its predicate offences. This isn’t the case elsewhere: for instance, the BVI’s definition doesn’t include the latter, meaning journalists who link a BVI entity to human trafficking, corruption, or environmental crimes may have a hard time accessing the data if they can’t prove how they think there is money laundering involved.  

Poor quality data: Where we could access data, what we received was substandard. We were given information on beneficial owners only at the point in time of the request, meaning that we could not confirm whether the owner had changed since the suspected wrongdoing occurred. In some instances, the beneficial owner was listed as another corporate entity, or even as a liquidator. In another, the information provided differed from what was on the UK’s Register of Overseas Entities, and appeared out of date. Given the time, effort and costs involved in making these applications, registrars should ensure the information being provided identifies the ultimate beneficial owner and is of material use to investigators.  

Risk of tipping-off: In the BVI, beneficial owners will be notified when their data is requested and will be given a chance to object to its release if they can demonstrate that releasing such data would be a threat to national security or against the public interest.  

Though the name of the individual would not be disclosed, given the size of certain investigative outlets, it would be easy to identify who is making the request. This mechanism would expose journalists or civil society organisations to physical or legal intimidation by those looking to hide their identity. It also provides the opportunity for those being investigated to liquidate or move illicitly obtained assets to avoid detection. The EU’s framework by contrast, protects the identity of applicants and prevents beneficial owners from being alerted when their data is being accessed. If beneficial owners have security concerns, requests can be filed pre-emptively to protect their identity from disclosure.  

Gagging clauses: In many jurisdictions, access to registers contains restrictive confidentiality requirements that may prevent journalists and investigators publishing material in the public interest. If you cannot disclose what you discover about criminal suspects, the information is of little use. This will have a chilling effect on those looking to expose corruption and undermines the use of this data as an accountability mechanism.  

Cost: Investigating companies in the Overseas Territories can present significant costs. The Turks and Caicos charge $250 per application while the BVI’s proposed fee is $75. These are unreasonably high, especially when they might only give access to details about another company higher up the ownership chain. 

Signs of Progress 

The overall pace of progress in key jurisdictions has been glacial. The level of friction, costs, and risks associated with making applications are obstructing civil society and journalists’ access to beneficial ownership data, undermining the purpose of these registers. Though some Overseas Territories seem to be in a race to the bottom when it comes to accessibility, credit should be given where it is due. Gibraltar, Montserrat, and St Helena have shown that privacy rights can be compatible with transparency, and that resources are not barriers to delivery. The Cayman Islands has also introduced an annual fee of $250, which will make it more practical for organisations and journalists that regularly need to apply for beneficial ownership data. These are welcome developments that other Overseas Territories should follow.           

What of Crown Dependencies?  

Though Crown Dependencies have very separate geographies and constitutional arrangements, they share one commonality with the Overseas Territories: they were equally reluctant to introduce public registers and have similarly used the EU ruling to opt for legitimate interest.  

Despite the EU clearly stating what legitimate interest access should look like, the Crown Dependencies have decided to follow the Overseas Territories’ approach more than their closer European neighbours’. Recent consultations suggest they will only allow case-by-case applications and allow beneficial owners to find out who is requesting their data, which will put journalists and civil society at significant risk of retaliation.  

Looking forward  

Legitimate interest models have produced many of the problems the UK Government and its offshore financial centres were warned about.  Registers are clunky, expensive, slow, and ineffective for investigating wrongdoing and holding wrongdoers to account.  

Just two days ago, Cayman Premier Andre Ebanks made clear that he would take no further steps to make its beneficial ownership register more accessible or open it to the public.  

As the UK prepares to host its International Summit on Countering Illicit Finance on 23-24 June, it should confront the outsized role that British financial centres continue to play in facilitating illicit financial flows, and how this fuels corruption, sanctions evasion, and tax abuse worldwide. The status quo is no longer tenable, so the Summit should focus on identifying creative and constructive solutions, in partnership with these jurisdictions, to address these shortcomings and support economic diversification.  Without them, the UK's claim to lead on financial transparency will ring hollow while its own territories operate registers designed to obstruct.

Further reading