The Cayman Islands says it will reveal corporate owners by 2023 – Quartz

In 2015, the Cayman Islands’ government analyzed the possibility that its favorable laws were being used to launder money. The British territory found, to little surprise, that it “faces internal and external money laundering and terrorist financing threats,” making it a potential home for international fraud, tax evasion, and drug trafficking.

Today, the notorious tax haven took a large step in tackling the problem, promising to publish the identities of everyone who owns a company there by 2023. That would bring the island nation in line with a law passed last year by the United Kingdom, and with EU directives.

“We will advance legislation to introduce public registers of beneficial ownership information,” the islands’ government said in a statement.

As a hefty offshore financial center, the tiny British Overseas Territory has played a role in some of the 21st century’s biggest corporate scandals. Enron used nearly 700 entities there to hide enormous debts from its balance sheet. Bear Sterns and Lehman Brothers, the two American casualties of the 2008 financial crisis, both placed billions worth of toxic assets there. In the run-up to that crisis, Citigroup parked enormous investment vehicles in the Caymans to remove them from its balance sheet. When they collapsed, the debts moved to the US and American taxpayers footed the bailout.

The territory has also been linked to alleged government corruption. Mining giant Glencore allegedly routed more than $75 million, which should have gone to a Congolese state company, to a Cayman entity owned by an Israeli billionaire friend of the Congolese president. The billionaire, who denies any wrongdoing, is alleged to have paid bribes to Congolese officials.

Greater transparency will hinder those trying to hide money on the islands, where it is now almost impossible to find out who owns a company registered there, anti-corruption campaigners say. “Once public registers are brought in across all the British Overseas Territories and Crown Dependencies, it will be much harder for the criminal and corrupt to use UK tax havens to hide and move stolen wealth,” said Naomi Hirst, a senior campaigner at anti-corruption NGO Global Witness.

Cayman contests the notion that it is a haven for corruption. “Financial secrecy is not tolerated in our jurisdiction,” its government said in the statement. “While undue focus is often placed on our jurisdiction, we fully appreciate the need to ensure coherent and efficient registration and exchange of beneficial ownership information to facilitate the transparent flow of legitimate capital.”

Cayman’s willingness to abide by the British law will be a relief to those concerned that tax havens could unilaterally declare independence from the UK in order to retain their secrecy. However, major offshore jurisdictions like the British Virgin Islands and Bermuda have yet to commit to opening their books.

Even if they did, it would be unlikely to solve the problem of offshore corruption. People who don’t want their dirty laundry aired in public have four years to up sticks to non-British tax havens, including US states like Wyoming and Nevada.