Government - Tax havens' action 'lax'

Offshore tax havens in the remnants of the British Empire have been denounced for failing to maintain proper financial regulation and take effective action to stamp out money laundering.

The Public Accounts Committee said a Foreign Office assessment that the situation on money laundering needs to get a lot better was ‘particularly worrying’.

MPs were disturbed by a fiscal exemption clause in anti-money-laundering legislation in the Cayman Islands and defective legislation in Bermuda, and said a failure by the Cayman Islands and the British Virgin Islands to respond to Foreign Office proposals on business regulation was ‘unacceptable’.

They also denounced the dependent territories’ tiny regulatory staff.

In the Turks and Caicos Islands, #200,000 was spent last year on seven people supervising 13,000 businesses, insurance companies and banks providing annual government income totalling #1.6bn.

The MPs were also highly critical of the former colonies’ own financial controls, following a report in which a Foreign Office consultant complained of ‘widespread laxity’ following financial procedures.

By last May, only one had up-to-date audited accounts and only three had legislatures with PACs of their own.