Public registers could do more harm than good
Veteran BVI fraud lawyer Martin Kenny has cautioned that opening up the territory’s company registers to the public could undermine decades of progress in fighting financial crime.
His warning comes ahead of next week’s visit by UK transparency campaigner Baroness Margaret Hodge.
Baroness Hodge, a former Labour MP and long-time critic of offshore financial centres, is expected to press the case for public access to beneficial ownership information — records that reveal the individuals behind BVI companies. Groups like Transparency International, Global Witness and Oxfam have long argued that secrecy fuels corruption, money laundering and tax evasion.
But Kenny said that making such information freely available could cripple fraud investigations.
“It is extremely hard to investigate a case if the other side knows that we’re onto them,” he explained. “The moment suspects realise the BVI has an open register, they will move their business elsewhere, to darker jurisdictions like Delaware, and we will lose the ability to trace stolen assets.”
For more than 25 years, Kenny’s firm has used BVI court-supervised disclosure orders to quietly follow stolen money through shell companies and recover it for victims. An open register, he argued, would tip off wrongdoers and wipe out the value of the territory’s accumulated investigative tools “overnight.”
He added that privacy and human dignity are also at stake.
“We don’t want the state climbing around our bedrooms or bank accounts without just cause. There must be a balance between transparency for law enforcement and the right of individuals to be left alone in their private affairs.”
The UK has been pressing the Virgin Islands to implement a public register of beneficial ownership, a move the local government has resisted, citing privacy concerns and unfair treatment compared to major onshore centres.
Baroness Hodge’s visit could renew pressure on the territory to comply.
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In 2015 there was considerable controversy about Baroness Hodge benefiting, to the tune of GBP £1.5 million, from assets repatriated from a Liechtenstein family trust in 2011 using the Liechtenstein disclosure facility, that reduced penalties and removed the risk of prosecution for Britons moving undeclared assets back to the UK. Coverage focused on the apparent hypocrisy in her condemnation of the use of tax havens. The Times reported that 75% of the shares in the family trust had previously been held in Panama, which Hodge had previously criticised for its financial secrecy and use as a tax haven. She never explained her apparent hypocrisy but issued a statement asserting that she had always fully declared the shareholding, never had a management role in the company, and had received assurances that the company always paid the appropriate tax, but has never disclosed the supposed tax advice that she claimed she received. The statement effectively confirmed that she was a see no evil, hear no evil, say no evil, trust fund babe!
Terrible, sneaky behaviour!
And who found this and disclosed it to the public?
Ah yes, the Times.
Journalists have an important role. As representatives of the public whose job it is to keep the public informed enough to be able to make voting and other decisions so democracy can function, the journalists who dig around and find this kind of hypocrisy should not be locked out in favour of the ‘privacy’ of the wrong-doer.
Just sayin’.
From a professional criminal justice perspective.
My gut is telling me that public access to beneficial ownership registers is unlawful. My simple reason is citing serious interference with and access to my personal data rights. Those personal and fundamental rights are legal and must be protected.
Mr.Kenny just explained why the UK’s Hodge wants this done.
if BVI financial services provides public registries for BVI companies? If 50% of active BVI companies dissolve and relocate to other more secretive jurisdictions then that stigma will attach to those jurisdictions. The BVI would then become more attractive to HONEST businessmen and their offshore companies.
Better to weed out the rotten apples than lose the whole crop!
FYI Margaret Hodge is the main representative of Israel in the Labour Party and has been instrumental on keeping pressure on UK government to keep supplying parts for weapons used to bomb children, women and innocent Palestinians.
As a Zionist cheerleader, she has the blood of 100s of 1000s on her hands.
Interesting. Mmmmm. Good reason for why we should carry on being corrupt and hide terrorists money behind secretive companies in the VI then, so they can also keep bombing women and children and innocent people.
Well spotted.