As much as anything, the Panama Papers have exposed Britain’s awkward and tangled relationship with its 17 crown dependencies and overseas territories. In the BVI, the official language is English, the flag, the Union Jack, the anthem, “God Save the Queen.” The queen appoints the governor, who in turn appoints a prime minister.

But while financial services account for roughly half the economy, the British Virgin Islands (population: 28,000) operates outside various U.K. rules governing finance and taxes. Corbyn, the British Labour leader, is calling for what is known as direct rule, which would end the territory’s privileged status.

According to the ICIJ, 113,000 of the nearly 215,000 companies known to have been established by the Panama firm, Mossack Fonseca, were set up in the British Virgin Islands, with thousands more in other British jurisdictions. The Panama firm has denied any wrongdoing.

After centuries of British control dating back to the days of Blackbeard the pirate, the British Virgin Islands gained separate status as a crown colony in 1960. Until financial services industry took off in the 1970s, the islands operated a poor rural economy. Ironically, the BVI benefited from the U.S. invasion of Panama in 1991, which prompted offshore businesses to find new havens, albeit temporarily.

Tighter Regulations

Cameron has done more than any other U.K. government to crack down on tax evasion while in office, yet Cable and others say it’s not enough. The U.K. passed legislation in 2015 outlawing bearer shares, which have been used by investors to protect anonymity because they don’t include the name of the owner on the certificate. The U.K. has also passed a law establishing a public registry of company beneficial ownership, which comes into effect this month.

"There was a lot of pushback here on the open register from the City of London and institutions,” said Cable, who worked on getting the legislation through.

In November 2014, Cameron wrote an open letter to overseas territories, urging them to follow suit by making beneficial ownership open to the public. They ignored his call. Under pressure from Cameron, the prime minister of the British Virgin Islands, Orlando Smith, late last year announced changes to require companies to file a register of directors. The register, which came into effect in January, isn’t public.

Smith also tightened money laundering rules to require financial institutions to keep a record of beneficial ownership of BVI companies. Again, the information isn’t public. The prime minister’s office didn’t respond to emails and telephone messages on Tuesday.

One reason Britain hasn’t demanded more may be concern about undercutting the competitiveness of its overseas territories, said Jolyon Maugham, a tax lawyer at Devereux Chambers in London.