"A public register of owners would have a profound effect,” Maugham said. “Tax havens compete with one another. If one becomes more transparent than their peers, they will lose business."
The British Virgin Islands, which reportedly has nearly 500,000 active registered companies, has committed to the Organization for Economic Cooperation and Development’s convention to tackle tax evasion and avoidance. Under the convention, the BVI has agreed to the exchange of financial account information with tax authorities in other jurisdictions. Smith told the islands’ assembly in December that the OECD had recognized the BVI as “largely compliant” with its tax convention and that the U.K. government had agreed it was no longer appropriate to label the territory as a tax haven.
“There’s a slight crack in the armor, but only slight,” said Richard Murphy, director of Tax Research LLP . “Some data will be exchanged. That assumes they receive honest data. We need this information on public record with it verified by the banks." Cable said the U.K. government has a precedent if it wants to impose direct rule.
In 2009, it took over day-to-day control of the Turks and Caicos Islands after an inquiry found widespread government corruption. Direct control went ahead even though former premier Michael Misick challenged the move in a court of appeal in London. In 2012, Britain handed back control after a general election.