London emerges as global black money laundering capital (2024)

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According to the UK’s deputy foreign secretary, the City of London and its crown dependencies handle close to 40% of the world’s dirty money.

According to Andrew Mitchell, the Foreign Office will make new demands on the crown dependencies and foreign territories to conform with UK rules that establish public records of beneficial share ownership.

Ever since the House of Commons enacted legislation in 2016, the United Kingdom has encountered resistance from foreign jurisdictions that are hesitant to establish public registries that reveal the true owners of funds held in tax havens.

Speaking to the Bright Blue thinktank, Mitchell said: “On the issue of dirty money, it is important to recognise that Britain has a dog in the fight. According to some estimates, 40% of money laundering around the world – this is money often stolen from Africa and Africans by corrupt businessmen, bent politicians and war lords and so on – 40% of that money comes through London and overseas territories and crown dependencies.”

Mitchell said that the UK will “see a greater emphasis now on introducing these open registers of beneficial ownership” now that David Cameron was the foreign secretary.

He warned: “If these overseas territories and crown dependencies want to have our king and our flag, then they must also accept our values, which is why we are so intent on ensuring dirty money cannot flow in and from there.”

The minister claimed that Lord Cameron made the issue of dirty money and the significance of public beneficial ownership registers “front and center” when the United Kingdom chaired the G8 group of industrialized nations in 2016.

It is commonly acknowledged that the government’s will to combat corruption in its overseas territories waned when he resigned as prime minister in 2016.

Nevertheless, in response to a backbench revolt by Conservatives, the UK approved a law in 2018 mandating that the government submit a draft order in council enforcing beneficial ownership registers by 2020.

Backbencher Mitchell was one of the renegade Tory MPs at the time.

Restrictions on who can access the registers are currently being imposed by the British Virgin Islands and the Cayman Islands, who have yet to adopt public registers and are invoking rulings from the European Court of Justice (ECJ). Decisions made by the ECJ do not apply to the BVI or the Cayman Islands.

The BVI minister of financial services, Lorna Smith, stated in 2013 that the government would not move forward with plans to create publicly accessible registers due to an ECJ ruling that she believed may violate people’s human rights.

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