Crown Dependencies ‘world’s largest tax-evasion network’: UK shadow home sec

The UK’s shadow home secretary has claimed that Crown Dependencies are part of the ‘largest tax-evasion network in the world’.

Speaking in the House of Commons, Labour MP Diane Abbott was reacting to what she described as a ‘startling oversight’ in the new Criminal Finances Bill, during a debate held last week.

The minister for security, Ben Wallace, opened the debate on behalf of the UK government, with shadow home secretary, Diane Abbott, responding on behalf of the opposition.

Abbott said that she welcomed the “measures to bear down on tax evasion” and welcomed the provision that makes it a criminal offence for corporations to fail to stop their associated persons facilitating tax evasion, in the bill.

But it is Abbott’s accusations against Jersey, Guernsey and the Isle of Man, being part of the ‘largest tax evasion network in the world’  that will will anger many industry observers.

‘Startling oversight’

“We particularly welcome the fact that this will have extra-territorial jurisdiction,” she said. “However, we regret that in the tax evasion measures (in part 3 [of the bill]) there is no reference to the British overseas territories and Crown Dependencies. That is a startling oversight.

“There are three Crown Dependencies, Jersey, Guernsey and the Isle of Man, and it is frequently argued that the British overseas territories and the Crown Dependencies are the largest tax evasion network in the world, so the failure to mention them in a bill which purports to deal with issues surrounding tax evasion is a major omission

Panama Papers

Abbott also pointed to the 14 British overseas territories, singling the British Virgin Islands (BVI) out as it is mentioned “no fewer than 113,000 times” in the so-called ‘Panama Papers’ data leak from earlier this year.

“BVI, with a population of just 29,000—fewer than my own constituents in Hackney—is home to 452,000 international businesses,” said Abbott. “Maybe the 29,000 population is particularly skilled at accountancy and banking, but maybe some of those business entities are shells for tax evasion.”

The bill eventually passed second reading without a division and will now be considered by the Public Bill Committee.

The bill was first presented to Parliament on 13 October, aims to tackle money-laundering and terrorist-financing and make it easier for the government to recover proceeds of crime

Bill amendments

Abbott said she will be seeking amendments as the Bill goes through the Committee process.

“It is frequently asserted that it is not possible to legislate for the British overseas territories and the Crown Dependencies, but the Ministry of Justice seems to think differently,” she added. “This is an issue that we will explore.”

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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