A United Kingdom transparency watchdog has warned that the Virgin Islands’ plan for a restricted beneficial-ownership register could endanger journalists and others who investigate financial crimes — but VI government leaders insist the territory is on the right track.
In a recent report titled “Unlocking Ownership Data,” Transparency International UK criticised the VI’s proposed “legitimate-interest” restrictions, which would strictly limit access to the register expected to launch early next year.
The VI’s draft access policy, published in June, would charge a $75 fee per search, require users to demonstrate a legitimate interest, and notify company owners when someone wants to access their records — giving them a chance to object.
TI-UK argued that such rules could tip off wrongdoers and endanger journalists, academics and civil-society groups investigating corruption.
“Unfortunately, the BVI’s approach to this issue is even more disruptive and dangerous for investigators,” the report states.
“They propose the registrar should immediately alert beneficial owners when their data is being accessed, including type of user, and the purpose for which the data has been accessed.”
The watchdog also took aim at the VI’s plan to provide access to data only on individuals holding at least 25 percent of shares or voting rights in a company.
That narrower threshold, it warned, would allow many beneficial owners to remain hidden behind nominee shareholders and trust structures.
Smith defends plan
Premier Natalio “Sowande” Wheatley — who has vigorously defended the proposed register in recent months — didn’t respond to requests to comment on the TIUK report.
But Financial Services and Economic Development Junior Minister Lorna Smith pushed back against the criticism, insisting that the VI is on the right track.
“While there is no global standard for public registers, we have engaged widely to ensure that our framework is clear, balanced and forward-looking, and we believe that this is the right approach,” Ms. Smith told the Beacon.
She added that legislation supporting the regime took effect on July 1 and implementation is currently in a “transitional period” for “testing, guidance and full system population.”
Stark warning
TI-UK Policy Manager Margot Mollat called for the VI and other offshore financial centres to adopt the organisation’s register access guidelines, which recommend allowing investigators broad access and implementing strong protections against “tipping off.”
“It has been five years since Britain’s offshore financial centres promised to end corporate secrecy,” Ms. Mollat said.
“These guidelines show there is a credible, practical path to deliver on transparency commitments and give investigators TI, journalists and civil society the tools they need to hold wrongdoers to account.”
She added that offshore secrecy helps facilitate tax evasion, corruption, environmental destruction, modern-day slavery and drug-trafficking.
“We can’t afford to get this wrong,” she said.
London watching
The issue has drawn attention from London as well.
UK Overseas Territories Minister Stephen Doughty told the House of Commons in July that he was concerned about the VI’s draft policy, and he announced plans to send UK Anti-Corruption Champion Dame Margaret Hodge on a fact-finding mission to the territory.
She is expected to arrive early next week.
Governor Daniel Pruce also said recently that the register’s access rules will be part of upcoming talks between Road Town and London.
