UK dependent territories have rejected pleas by the government to toughen their rules on financial regulation and crackdown on tax evasion, the Foreign Secretary Robin Cook will say this week.
The islands, which include Bermuda, the Caymans and the British Virgin Islands, argued they should determine their own tax regimes and that financial regulation in the territories was sufficient to deter money laundering.
Their response follows a six-month review of constitutional relations with the dependent territories by the Foreign Office.
Cook’s statement, which was due to be delivered yesterday in the Commons, is the result of a full-scale review of relations with the dependent territories because of fears about the potentially destabilising effect of the illegal drugs trade and its effect on the territories’ financial services industries.
In the House of Lords, foreign minister Lord Macin-tosh of Haringey, confirmed the review included the state of financial regulation in the territories. He said: ‘The UK has been active in supporting international agreements to tackle harmful tax competition.’
He was pressed by for-mer Treasury minister Lord Barnett if the objective was the removal of tax haven status which would ‘damage the investment of those islands from non-UK taxpayers’ or concerned with UK taxpayers making use of the shelters.
No peace for island havens, page 10.
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