Tax haven operators hope to persuade China to block global transparency moves

From the BVI Beacon in the British Virgin Islands, a Special Report entitled Under pressure, BVI fears big impact on financial services. The BVI, and particularly a number of mostly white, male expatriate workers, have made a living out of secrecy. They don’t like all this transparency stuff that we and our colleagues are pushing for, and which is now becoming more widely accepted by world leaders. The report notes:

“During a public consultation that ended in March, stakeholders were asked if the territory should create a central registry of beneficial ownership and if it should be public.

For many industry practitioners here, the answer, at least to the second question, is a resounding “no.” They argue that maintaining client privacy — which they assert has many legitimate uses — is paramount to retaining the territory’s position as a global leader for company incorporations. Any change could cause clients to move to jurisdictions that don’t publicise beneficial ownership, quickly making a huge impact on the VI’s industry, they say.”

In other words, ‘we like the money – and the hundreds of millions of direct or indirect victims in the rest of the world be damned.’ This remains a rogue jurisdiction, and it once again reveals a statement by Britain’s Prime Minister David Cameron – that “I do not think it is fair any longer to refer to any of the overseas territories or Crown dependencies as tax havens” – to be nothing more than empty lobbying on behalf of the forces of financial secrecy.

The article is interesting itself, and we were also particularly interested to note this comment, from a local practitioner:

“The [B]VI may be able to use its traditionally strong links to China, which is not a G8 member, to exert influence as the global rules on central registries are drafted.”

Although we’ve buried this down in the story, it is really the main point of what we wanted to say here. This is just one practitioner, but the fact that a knowledgeable person is making such a statement is obviously of great concern to the ordinary people of the world.

There are, of course, élite forces in China that are extremely interested in secrecy. See, just for example, this Chinaleaks story, or this one.

For a history of how the BVI became a tax haven, see here.