Unlock the Editor’s Digest for free
There are trillions of dollars of assets in offshore accounts around the world. Much of it is held in opaque shell companies and trusts, safely shielded from public scrutiny. Over the past decade, major data breaches and investigations – from the Panama Papers in 2016 to the FinCEN Files in 2020 – have focused attention on how the secret arrangements have fueled tax avoiders, money launderers and terrorist activities. The net has become tighter. Yet many jurisdictions make it too easy for illegal activities to continue with impunity by failing to implement the highest level of transparency: public beneficial ownership records.
Open registries help legal experts, non-governmental organizations and journalists quickly link money trails to named individuals and detect suspicious activity. In 2016, Britain took the lead by introducing a mandatory public register of people with significant control over companies. It then received commitments from its overseas territories, such as the Cayman Islands and the British Virgin Islands, and crown dependencies to establish them. But many have hesitated and missed implementation goals.
Britain must use its influence to push for greater transparency. Ahead of a three-day joint cabinet meeting this week where officials will meet overseas counterparts, British MPs called on Foreign Secretary David Lammy to speed up public records efforts. A Financial Times analysis also found that companies registered in the Overseas Territories exported $134 million worth of goods to Russia in 2024, in clear violation of British sanctions. These areas and dependencies must recommit to strict action plans to implement open databases.
The globalization and digitalization of capital means that responsive cross-border cooperation in monitoring financial flows is crucial. In theory, international initiatives, led by the Financial Action Task Force and the OECD, have made progress setting standards for law enforcement agencies to access company information upon request. In practice, obtaining international approval is often challenging and cumbersome. That gives bad actors time to move their assets. Legitimate interest registers, which grant conditional access to researchers, may have similar disadvantages.
Major financial centres, including the US and Switzerland, are also among the worst jurisdictions when it comes to enabling secrecy, according to the report Tax Justice Network. In 2022, a ruling by the European Court of Justice blocked the introduction of public registers in the EU. The decision has been cited by other jurisdictions as a reason for not pursuing full transparency. New hubs are also emerging. The money linked to corruption, organized crime and sanctions evasion has shifted to Dubai Hong-Kong.
The largest jurisdictions should lead by example, including by expanding transparency efforts to trusts and other assets. As more areas implement public records, those that don’t have them risk damaging their image. The global push for transparency can also be stimulated through technical assistance, especially for those with less data expertise. It could also explore placing restrictions on sourcing from undisclosed entities, or even taxing payments to them. Exemptions may be granted for persons who pose a real safety risk.
Many favored incorporation destinations risk losing business if they open themselves up to scrutiny – but economies that rely on secrecy are hardly built on strong foundations. Countries and territories can still compete by offering low taxes and light regulation. Using opacity as a unique selling point instead undermines tax collection, sanctions, and anti-corruption efforts around the world. A shared commitment to open access to data would make the financial system fairer, more secure and stronger for everyone.