Transparency campaigners and their backers in the United Kingdom Parliament have spent years lecturing British overseas territories, including the Virgin Islands, about the need for greater transparency. These arguments over beneficial-ownership data have been big on self-righteousness, but they have also relied heavily on a “do as I say, not as I do” attitude.
A beneficial-ownership register, which holds data about the beneficial owner(s) who ultimately own or control a company or other legal entity, is only as good as its verification. If that data is not verified, it can be near-useless.
The latest evidence shows that Companies House, the UK’s highly visible beneficial-ownership register (which is free to access), has been onboarding crooks at an alarming rate, using “men of straw” as lackeys and frontmen. This has enabled organised crime to trade in plain sight on Britain’s high streets, leaving everyone else — including law enforcement — to play a game of “whack-a-mole” to catch up.
‘Grey-listed’
In June of this year, the VI, where I live and my firm is based, was “grey-listed” by the Financial Action Task Force (FATF), the global body which disciplines countries and territories for not measuring up in taking action against money laundering and terrorism and proliferation financing. There was much rejoicing among those demanding greater transparency.
Of course, if the rich and famous are utilising illicit tax evasion schemes, in which offshore financial centres play a part, then they are crooks and deserve to be prosecuted. But what role does “transparency” play in policing this issue? The answer is none. Crooks do not play by the rules, and we end up with people’s privacy being invaded in order to dish the dirt and comment on a football or movie star’s wealth.
Double standards
A recent BBC undercover investigation laid bare the double standards at play here. The investigation revealed that a Kurdish criminal network had been using “ghost directors” (paid frontmen) to lend their names to scores of UK companies. This in turn allowed others (mostly migrants and asylum seekers) to run mini-marts across the UK that profited from the sale of illegal vapes and cigarettes.
BBC reporters, posing as Kurdish asylum seekers, were shown how to take over a shop, avoid scrutiny, and enjoy additional weekly turnovers of up to £3,000 from illicit-tobacco sales. Many of the businesses exposed were incorporated, dissolved and reincorporated with small variations in names and dates — classic red flags for tax evasion and the evasion of regulatory scrutiny.
Most professionals reading this would instantly identify these red flags. Yet in this instance, it would appear that staff at Companies House failed to do so, despite a recent beefing up of their powers.
Companies House is being exploited across the board. The Kurdish crooks’ scheme depended on the ease with which false or nominee directors could be registered and cycled through corporate shells with minimal friction. Belatedly, new verification powers are finally being unveiled this week for the UK’s beneficial-ownership register.
The issue is not accidental, in my view: It flows from the UK’s longstanding “registry, not a regulator” posture, where data has historically been presumed to have been filed in good faith with minimal validation at the point of entry. This data is easily accessible to the public, but the lack of due diligence and know-your-customer requirements at Companies House means that the truth about corporate ownership in the UK has never been more opaque.
Tax evasion
Meanwhile, one of the biggest bugbears for transparency campaigners is tax evasion. It must have come as a shock, therefore, when the UK’s National Audit Office warned that the latest controls were not intended to verify addresses or places of business and would have limited impact on value-added-tax evasion until identity-verification systems and secondary legislation arrive.
The planned deeper integration between His Majesty’s Revenue and Customs (the tax authority) and Companies House will take an estimated minimum of five years, and more likely nearer a decade. This is an eternity in the face of organised crime such as that exposed by the BBC.
Worse, enforcement of existing powers has been almost non-existent. In April 2025, The Guardian reported that Companies House had collected only £1,250 of £58,500 in fines issued after it gained new powers. Meanwhile, the register still contained nonsense appointments such as “Darth Vader” and “Santa Claus.” If your gatekeeping message to crooks is “We may fine you but probably won’t collect,” don’t be surprised when that gateway is overrun by thieves and vagabonds.
New measures
To be fair, the UK is now rolling out mandatory identity verification. From April 8, individuals have been able to voluntarily verify their details. And from Nov. 18, verification has been mandatory for new directors and persons with significant control, with a 12-month transition for existing officeholders through confirmation-statement deadlines into late 2026. Acting as a director without verification will become an offence from November 2026.
However, practitioners are already reporting failure rates and friction with the gov.uk website. Early user feedback, while anecdotal, highlights ID-matching failures and process breakdowns that bad actors will exploit. Legitimate users will still grind through verification. And herein lies the problem — one that I am constantly trying to underline.
The only people that these reforms will negatively impact will be legitimate users: those who play by the rules. The crooks will simply bypass them, using cunning and guile to outwit the system. The cost to the legitimate user could soar, while the delays begin to build and potentially impact on the ability to do business quickly and profitably. This damage will have been self-inflicted by the UK.
‘Punchbag’
Transparency campaigners’ favourite punchbag remains the “secrecy” of the overseas territories, with periodic finger-wagging whenever a deadline for public beneficial-ownership registers is missed or extended. However, since 2017, the VI has operated controlled-access beneficial-ownership registers, which mandate that registered agents hold verified beneficial-owner details that can be made accessible to competent authorities on request.
Critically, the VI offloads know-your-customer duties to licensed, supervised formation agents who must obtain and hold documentary evidence of identity and control before a company is activated. This is front-loaded due diligence: precisely what the UK is only now approximating for directors and persons with significant control.
In short, you can publish all the data you like through public beneficial-ownership registers. But if the onboarding know-your-customer measures and due diligence are weak — or, as the BBC investigation reveals, corruptible through paid straw men — then transparency just publishes lies.
Mr. Kenney is head of firm at MKS Law, a Virgin Islands litigation practice that specialises in cross-border fraud and asset-recovery matters.
