The United Kingdom has long expressed concerns about British Overseas Territories, specifically their offshore status and lack of tax regulations. Recently, the UK indicated frustrations with the Cayman Islands for their lack of assistance when it comes to combatting money laundering.
The National Crime Agency has been working hard to fight money laundering. However, officials feel that Cayman Islands authorities are not cooperating fully, leading to major frustration.
The NCA is the leader in the UK’s fight against money laundering, a crime it estimates is worth as much as £1 billion a day. The National Crime Agency asked for information from the Cayman Islands that the organization was not otherwise able to receive. The desire to get information from the Cayman Islands is natural since many of the investigations from the NCA brought it to offshore firms that are registered there. This is no surprise as the Cayman Islands is among the world’s biggest financial centers, making it a popular offshore location for tax evasion, money laundering, and more.
The director of the NCA, Donald Toon, had asked the authorities in the Cayman Islands for information on the owners of the firms that appeared in the investigations. According to Toon, the authorities in the Cayman Islands refused to cooperate. This was a sharp contrast to the typical reaction when officers ask for help from the British Overseas Territories. They typically supply clear, helpful, and unambiguous information.
Other Investigations from the NCA
In addition to the investigations requiring offshore assistance from the Cayman Islands, the National Crime Agency has also significantly increased its efforts to seize dirty Russian money that enters the United Kingdom. The organization has also begun investigations of British-based accountants and lawyers who are suspected of participating in money laundering.
In addition to the concerns about money laundering and the lack of help from the Cayman Islands, the UK has also been dealing with issues related to tax havens. These issues became more prominent following the Paradise Papers that revealed the complex offshore structures that high-net-worth individuals, including corrupt ones, use. The NCA indicated that there are new indications that criminals have found more tax havens that allow for exploitation of lax regulations, so they can disguise connections to corrupt assets. According to Toon, some of these offshore locations are small and even harder to reach or gather information on than the Cayman Islands.
Unexplained Wealth Orders
There was also the relatively recent development of the Unexplained Wealth Orders, which began on Jan. 31. These orders require high-net-worth individuals to explain their asset sources if corruption is suspected for valid reasons. As of mid-September, the UK had not yet used an order, but it could prove particularly useful for money laundering and tax evasion investigations.
Did you find this article useful?
Subscribe to our newsletter for more!