Show me the money - British overseas territories deal

Now Reading:

Show me the money - British overseas territories deal

Text size Aa Aa

Tax havens such as Bermuda, the Cayman Islands and the British Virgin Islands are to work more closely with the UK and other European countries to fight tax evasion.

Those places – which are effectively British colonies with some self-government – will automatically provide details about the ownership of bank accounts and how they are used.

UK Finance minister George Osborne announced that in the run-up to this year’s summit of the G8 richest nations, which Britain is chairing, as it makes tax evasion a priority.

“This represents a significant step forward in tackling illicit finance and sets the global standard in the fight against tax evasion,” Osborne said.

The information will be shared by Britain, Germany, France, Italy and Spain, which agreed in June last year to work together to combat tax evasion.

The Isle of Man also will be subject to the deal, but two other major offshore centres, Jersey and Guernsey, have not yet agreed to share information with countries other than Britain.

The other territories affected by the deal are the Caribbean islands of Anguilla, Montserrat and the Turks and Caicos.

With governments in most advanced economies short of tax revenue after the financial crisis, pressure has been growing on small territories with big banking sectors to lift bank secrecy and do more to combat tax dodging and money laundering.

The United States has been in a lengthy dispute with Switzerland over the latter’s bank secrecy rules, while the European Union also has increased pressure on two of its smaller members, Austria and Luxembourg.