UK network remains biggest financial secrecy supplier despite reining in


UK network remains biggest financial secrecy supplier despite reining in

British overseas secrecy hubs have reduced their overall supply of financial secrecy to the world but remain, as collective with the UK, the world’s biggest enabler, according to the Tax Justice Network’s Financial Secrecy Index 2022 – a ranking of the world’s biggest suppliers of financial secrecy. The UK, however, increased its supply of financial secrecy at home despite actively taking measures to rein in some of its overseas jurisdictions’ financial secrecy.

The UK and its overseas jurisdictions are collectively responsible for costing the rest of the world $87.9 billion in lost tax a year by enabling non-residents to hide their finances and evade tax. The UK itself loses $25 billion a year to offshore tax evasion by wealthy individuals enabled by other countries.1

The Tax Justice Network is urging the UK government to fight instead of fuel financial secrecy by adopting the transparency measures laid out in the cross-party Economic Crimes Manifesto that was announced last week by Dame Margaret Hodge MP and Kevin Hollinrake MP.2

The biennial Financial Secrecy Index 2022, published earlier this week, reported that the provision of financial secrecy services like the type utilised by Russian oligarchs, tax evaders and corrupt politicians has decreased globally due to transparency reforms. But the UK together with four other G7 countries – the US, UK, Japan, Germany and Italy – minimised that progress by more than half by fuelling financial secrecy instead of curbing it.3

British jurisdictions’ rankings on the index

Two British jurisdictions, the British Virgin Islands and Guernsey, ranked among the world’s top 10 biggest suppliers of financial secrecy. The British Virgin Island, which has recently come under the spotlight following corruption investigations and the arrest of its premier in the US on drug charges4, remained in 9th place on the index while Guernsey moved up from 11th to 10th.

Despite increasing its supply of financial secrecy since the 2020 edition of the index, the UK dropped from 12th to 13th in the ranking after both Germany and China sharply climbed up the ranking and overtook the UK on their way. At the top of the ranking now stands the US, which increased its supply of financial secrecy to the world by almost a third (31 per cent) since 2020, resulting in the largest supply of financial secrecy ever measured by the index.5

The Financial Secrecy Index ranks each country based on how intensely the country’s financial and legal system allows individuals to hide and launder money extracted from around the world. The index grades each country’s financial and legal system with a secrecy score out of 100 where a score of 0 is full transparency and a score of 100 is full secrecy. The country’s secrecy score is then combined with the volume of financial services the country provides to non-residents to determine how much financial secrecy is supplied to the world by the country.6

A higher rank on the index does not necessarily mean a jurisdiction has more secretive laws, but rather that the jurisdiction plays a bigger role globally in enabling banking secrecy, anonymous shell company ownership, anonymous real estate ownership or other forms of financial secrecy, which in turn enable money laundering, tax evasion and the evasion of sanctions. A highly secretive jurisdiction that provides very little financial services to non-residents, like Maldives (ranked 91st), will rank below a moderately secretive jurisdiction that is a major offshore destination, like Luxembourg (ranked 5th).

Disclosures dent overseas British secrecy

British Overseas Territories and Crown Dependencies are now responsible for 8.9 per cent of all financial secrecy in the world, down from 13 per cent in 2020. The UK itself supplies 1.6 per cent. Collectively, the UK and its overseas jurisdictions supply over 10 per cent of all financial secrecy in the world, which is almost double the amount of financial secrecy supplied by the US, the highest ranking jurisdiction on the Financial Secrecy Index 2022.

The overall drop in British overseas jurisdictions’ financial secrecy is partly due to a significant drop in the supply of financial secrecy recorded by the index for Cayman. Cayman dropped from 1st to 14th on the index after the British Overseas Territory disclosed for the first time data indicating the true scale of the financial services it provides to non-residents – revealing it to be significantly lower than previously estimated.

In absence of self-reported data from the Cayman authorities in the IMF Balance of Payments database, the index previously utilised data from the IMF Coordinated Portfolio Investment Survey database.7 Only 30 of the 141 jurisdictions ranked on the index do not have data reported on the IMF Balance of Payments database and so are alternatively assessed on data from the IMF Coordinated Portfolio Investment Survey database. However, Cayman’s highly disproportionate hosting of cross-border portfolio investments made it uniquely placed to see significant discrepancies in estimated financial activity arising from the two databases.

Despite the disclosure of the lower figures on the provision of financial services, the small British Overseas Territory, with a population of 66,0008, continues to rank above some of the world’s largest economies, including G20 members Argentina, Australia, Brazil, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea and Turkey, demonstrating the oversized volume of wealth being sent offshore to Cayman.

However, even when excluding Cayman’s drop from the analysis, the overall supply of financial secrecy from British overseas jurisdictions sees a significant reduction. This is due to both improvements in secrecy scores as well as an overall trend of British overseas jurisdictions providing a lower volume of financial services to non-residents.

On average, the secrecy scores of British overseas jurisdictions reduced by nearly 2 points out of 100, indicating some transparency improvements in the legal and financial systems of most British overseas jurisdictions. While improvements in secrecy scores were driven by several factors, there were two notable patterns in improvements among the jurisdictions.

First, half of British overseas jurisdictions secured improved evaluations from the Financial Action Task Force (FATF). Nonetheless, the Financial Action Task Force found that these jurisdictions still have lots of room for improvement on anti-money laundering efforts.

Second, a number of British overseas jurisdictions have started publishing their statistics on bilateral trade in goods, bringing some transparency to financial activity conducted in the jurisdictions.

Bucking the trend of reduced financial secrecy among British overseas jurisdictions, however, are Guernsey and Anguilla. Guernsey increased its supply of financial secrecy to the world by 8 per cent and Anguilla by 4 per cent. Both jurisdictions’ increases in financial secrecy were driven by the jurisdictions providing more financial services to non-residents.

The UK’s secrecy score increased by 1 point from 46 to 47 out of 100 following a greater emphasis put on transparency of court judgments by the 2022 edition of the index. The UK does not currently publish all First-tier Tribunal and Upper Tribunal judgements.

UK reins in secrecy in Cayman and Gibraltar with UN conventions

The UK government enforced a rare reining in of financial secrecy in Cayman, which was briefly blacklisted by the EU in 20209, and in Gibraltar by extending the application of the UK’s ratification of the UN Convention for the Suppression of the Financing of Terrorism to both jurisdictions and the UN Convention against Corruption to Cayman. Both conventions were ratified by the UK 20 years ago but the extensions to Cayman and Gibraltar were made in 2020 and 2021.

The move also involved a rare admission of responsibility from the UK government over the global relations of its overseas jurisdictions. The UK has often been criticised for the way in which its network of overseas jurisdictions operates as a web of tax havens centred around the City of London – an arrangement infamously referred to as the “UK spider’s web”.10 While UK officials have publicly maintained that the jurisdictions are independent, the UK has full powers to impose or veto lawmaking in these jurisdictions and the power to appoint key government officials rests with the British Crown.

In its communications to the UN Secretary-General announcing the application of the UN conventions to Cayman and Gibraltar, the UK government publicly confirmed it is “responsible” for Cayman’s and Gibraltar’s international relations.11

Golden visa backdoor risks UK efforts on sanctioned Russian oligarchs

The Financial Secrecy Index 2022 reports that a new golden visa scheme in Bermuda that came into effect March 2021 may risk undermining the UK’s recent axing of the UK’s residency visa scheme. The UK government closed its tier 1 investor visa in February 2022 amid the build-up of Russian forces on Ukraine’s border, stating that the scheme was “failing to deliver for the UK people and gives opportunities for corrupt elites to access the UK”.12 The scheme, which allowed people with at least £2m in investment funds and a UK bank account to apply for residency rights, was used prior to the scheme’s suspension by seven Russians who are now under sanctions.13

In a statement to the House of Commons announcing the closure of the scheme, UK Home Secretary Priti Patel said:14

“The operation of the route has facilitated the presence of persons relying on funds that have been obtained illicitly or who represent a wider security risk. In addition, the route has been compromised by organised abuse of its requirements through bogus investments schemes. These concerns have been highlighted, for example, in the findings of the Intelligence and Security Committee’s Russia report in relation to the scheme, as well as the recent Chatham House report on money laundering.”

Bermuda’s golden visa scheme, called the Economic Investment Certificate and the Residential Certificate Program, came into effect in March 2021. Given the role British overseas secrecy hubs like Bermuda play in funnelling illicit finance into the City of London, the scheme may risk serving as a backdoor for sanctioned Russian oligarchs, as well as tax evaders and money launderers from around the world, in place of the UK’s recently axed residency visa scheme.

Loopholes thwart new UK safeguards on trusts

The Financial Secrecy Index 2022 highlights dangerous shortcomings in countries efforts to prevent trusts15 from being used to hide wealth and assets from the rule of law. Of all the financial secrecy practices to have come under scrutiny in recent months, the use of trusts as a secrecy weapon of choice has particularly gained attention after investigative journalism revealed Russian oligarchs using trusts to hide their assets16 and after the UK Chancellor Rishi Sunak was found to be listed as beneficiary of trusts in the British Virgin Islands (ranked 10th on the index) and Cayman (ranked 14th).17

The UK did not improve its scoring on the index for its regulation of trusts – one of the 20 indicators on which each country’s secrecy score is evaluated – despite passing new rules requiring trusts to register their ownership information. The new rules permitted too many loopholes and exemptions to constitute a material improvement in transparency on the index.18

Calls grows to rein in lawless wealth with global asset register

Leading economists and campaigners from around the world called on the G7 finance ministers who met this week to commit to a global asset register in order to bring law and transparency to the trillions in wealth and assets secretively held offshore.

The proposal for a global asset register has rapidly gained traction after Italian Prime Minister Mario Draghi called in March for a public international asset register for individuals with assets of more than €10 million.19 The commissioners of the Independent Commission for the Reform of International Corporate Taxation (ICRICT), including leading economists Gabriel Zucman, Joseph Stiglitz and Thomas Piketty, and the French investigative judge Eva Joly, called on the G20 in an open letter last month to establish a global asset register.20

Alex Cobham, chief executive at the Tax Justice Network, said:

“There is more wealth hidden offshore beyond the rule of the law than there are US dollars and Euros changing hands today – more than twice more to be specific. That lawless wealth is a threat to our democracies, our economies and our safety. Governments must establish and link up national asset registers to bring law and transparency to the trillions hidden offshore, and end the wild west era of wealth.

“The UK’s attempt to clamp down on sanctioned Russian assets is being tripped up by its own legacy of fuelling financial secrecy around the world. But the assets held offshore by sanctioned Russians is just a sliver of the wealth that British financial secrecy has helped evade the rule of law for decades. Britain showed genuine global leadership in 2016 by being the first country to establish a beneficial ownership register. The UK has a unique opportunity today to lead again and establish the world’s first international asset register by setting up and linking up asset registers across its jurisdictions.

“The cross-party Economic Crime Manifesto, with its broad support from experts and civil society, lays out crucial steps that the government must take – both to protect itself from further corruption and tax abuse, and to curb the $90 billion of tax revenue losses that the UK imposes on countries all around the world”


Contact the press team: [email protected] or +44 (0)7562 403078

Secrecy Score improvements summary

JurisdictionStarted publishing statistic data on bilateral trade in goods?Improved Financial Action Task Force evaluation or adopted recommendations?Ratified (1) UN Convention for the Suppression of the Financing of Terrorism and/or (2) UN Convention against Corruption?
AnguillaYesYes1.  No

2.  Yes (2015)

BermudaAlready didYes1.  Yes (2014)

2.  Yes (2018)

British Virgin IslandsYesNo1.  Yes (2012)

2.  Yes (2006)

Cayman IslandsYesYes1.  Yes (2021)

2.  Yes (2020)

GibraltarYesYes1.  Yes (2020)

2.  No

GuernseyNoNo1.  Yes (2008)

2.  Yes (2009)

Isle of ManNoNo1.  Yes (2008)

2.  Yes (2012)

JerseyNoNo1.  Yes (2008)

2.  Yes (2012)

MontserratYesNo1.  No

2.  No

Turks and Caicos IslandsYesYes1.  No

2.  No



Notes to Editor

  1. The Tax Justice Network’s State of Tax Justice 2021 reports that the world loses $483 billion in tax a year to global tax abuse committed by multinational corporations and wealthy individuals. The UK and its network of Overseas Territories and Crown Dependencies collectively inflicts a tax loss of $87.9 billion on the rest of the world by enabling private tax evasion. This number goes up to $189 billion when including the tax losses the UK and its network inflict on the rest of the world by enabling cross-border corporate tax abuse. The UK itself loses $25 billion a year to private tax evasion enabled by other countries. This number goes up to $52 billion when including the tax the UK losses to cross-border corporate tax abuse enabled by other countries.
  2. Read the cross-party Economic Crimes Manifesto here.
  3. The Financial Secrecy Index 2022 was published on Tuesday 17 May 2022. In this new press release, we share new analysis on the UK’s offshore network of British secrecy hubs. You can find the older press release announcing the launch of the index here. And you can see the full index here.
  4. Read more about corruption investigations in the British Virgin Islands, and the arrest of the British Virgin Islands’ premier here.
  5. The rise of the US to the top of the index is at odds with US President Joe Biden’s commitments and efforts to tackle global financial secrecy. The US now fuels more global financial secrecy than Switzerland, Cayman and Bermuda combined. The index identifies that one of the most harmful factors behind the US’s position as secrecy capital of the world is the US’s refusal to reciprocally exchange information with other countries’ tax authorities. Read more about the US’s ranking on the index here.
  6. The 2022 edition of the Financial Secrecy Index ranks a total of 141 jurisdictions. Every jurisdiction ranked on the index is given two opportunities before the index is published to feedback on and dispute the index’s assessment of their financial and legal systems. We share our existing assessment from the previous edition of the index with every ranked jurisdiction at the start of the research process. Towards the end of the research process, we share our new, preliminary assessment for the new edition of the index with every jurisdiction. If a jurisdiction provides sufficient evidence that counters an assessment we made, the assessment is changed to reflect the evidence.The jurisdictions are ranked by how much financial secrecy they supply to the world, indicated by their FSI Value on the index. A jurisdiction’s FSI value is determined by combining its Secrecy Score and Global Scale Weight.A jurisdiction’s Secrecy Score is a measure of how much scope for financial secrecy its financial and legal systems enable, where a score of zero means the jurisdiction’s laws allow no scope for financial secrecy and a score of 100 means the jurisdiction allows unrestrained scope. Each jurisdiction’s Secrecy Score is based on 20 Secrecy Indicators which cover a range of regulations such as banking secrecy, automatic exchange of information, beneficial ownership registrations and transparency on tax rulings. Each jurisdiction’s Secrecy Score breakdown can be viewed in full detail on the index’s country profile pagefor the jurisdiction. A jurisdiction’s Secrecy Score is more than just a report card, it’s a troubleshooting manual that analyses the laws and loopholes that policymakers can amend to tackle financial secrecy.A jurisdiction’s Global Scale Weight is a measure of how much in financial services the jurisdiction provides to residents of other countries, like opening a bank account or setting up a company. This is presented as a percentage of all financial services globally provided by all jurisdictions to non-residents. The index uses IMF Balance of Payments statistics on exports of financial services and other IMF data on cross border financial activity to determine the jurisdictions’ Global Scale Weight.Combining a jurisdiction’s Secrecy Score and Global Scale Weight gives a picture of how much of the financial activity conducted offshore by individuals from around the world is put at risk of financial secrecy by the jurisdiction’s laws. Whereas tax haven blacklists usually only take laws into consideration and are often susceptible to political lobbying, the Financial Secrecy Index more accurately identifies harmful jurisdictions by taking into account how laws and offshore financial activity intersect in the real world to create financial secrecy risks.The Financial Secrecy Index’s methodology is periodically updated to address the evolving nature of the financial secrecy landscape, similar to how a firewall is updated to protect against newly exposed vulnerabilities. The full methodology is available here.
  7. Cayman’s data on the IMF Balance of Payments database was first published in November 2019 after the cut-off date for the 2020 edition of the Financial Secrecy Index. Cayman’s Ministry of Financial Services and Home Affairs responded in December 2019 to a preliminary assessment of its ranking on the 2020 edition of the index, in which the Ministry did not dispute the index’s assessment that the IMF Balance of Payments Database did not hold data on Cayman. The Ministry did not inform the Tax Justice Network that Cayman’s data was published on the database after the index’s cut-off date, which the Tax Justice Network would have considered making an exception for, in line with our usual procedure.
  8. Cayman has a population of 65,720 as of 2020 according to data from the World Bank.
  9. Read more about the EU’s blacklisting of Cayman here.
  10. Extensive research has documented the ways in which the UK’s network of jurisdictions operates as a web of tax havens facilitating corporate and private tax abuse, at the centre of which sits the City of London. The UK spider’s web consists of the following British Overseas Territories and Crown Dependencies: Cayman Islands, British Virgin Islands, Guernsey, Jersey, Gibraltar, Bermuda, Isle of Man, Anguilla, Turks and Caicos Islands and Montserrat. For more information about the UK spider’s web, please see Michael Oswald’s documentary “The Spider’s Web: Britain’s Second Empire”, produced by Tax Justice Network founder John Christensen. The documentary is available on YouTube in EnglishSpanishFrenchGerman and Italian and has been viewed nearly 5 million times.
  11. View the UK government’s communications to the UN Secretary-General announcing the application of the conventions to Cayman here and here.View the UK government’s communications to the UN Secretary-General announcing the application of the convention to Gibraltar here.
  12. Read the UK Home Office’s statement on closing the residency scheme here.
  13. Read more about the UK’s awarding of visas under the residency scheme to now sanctioned Russians here.
  14. Read UK Home Secretary Priti Patel’s statement to the House of Commons on 21 February 2022 announcing the closure of the residency scheme here.
  15. Trusts can be abused to shield the identity of owners of wealth and muddle the status of ownership for the purpose of paying less tax and escaping the rule of law. Trusts have increasingly become one of the most important mechanisms used in modern global finance. Read more about trusts here and in more detail here.
  16. Read more about the Russian Asset Tracker assembled by the Organized Crime and Corruption Reporting Project in collaboration with more than 25 major news outlets here.
  17. UK Chancellor Rishi Sunak ‘listed in tax haven as trust beneficiary’ while chancellor, read here.
  18. More information on the UK’s scoring on trust regulation is available on the Financial Secrecy Index’s country page for the UK. See “Secrecy Indicator 2” in the “Secrecy Score breakdown” section provided on this page for more detail. Additional reading on the UK’s trust laws is available here.
  19. Read Italian Prime Minister Mario Draghi’s call for an global asset register here.
  20. Read about the open letter from leading economists calling for a global asset register here.