This article is more than 1 year old

This article is more than 1 year old

Offshore secrecy represents a threat to the UK’s national security and justifies parliament forcing Jersey, Guernsey and the Isle of Man to adopt public registers of beneficial ownership, according to a letter written by two campaigning backbenchers.

Andrew Mitchell, a Conservative, and Labour’s Margaret Hodge told the chief ministers of the crown dependencies their concerns were so great they would press ahead with moves to demand transparency against the will of the three territories.

Delay to tax havens’ public registers ‘risks national security’ Read more

The MPs wrote: “We have no doubt that the UK has sufficient legal powers [to intervene because] the UK is responsible for ensuring the ‘good government’ of the crown dependencies.

“Prospective money laundering taking place through the crown dependencies threatens the UK’s national security and is an issue within the jurisdiction of the UK.”

Their letter makes clear that the MPs will seek to amend a Brexit-related financial services bill, to make Jersey, Guernsey and the Isle of Man reveal against their will who owns shares in companies registered in their territories.

Mitchell and Hodge’s amendment was expected to pass through the Commons with the support of Tory rebels last week until the government pulled the bill at the last minute, saying ministers needed time to study its constitutional impact.

The three crown dependencies say they are self-governing territories and it is not for the UK parliament to dictate how they are regulated. They maintain closed registers of company ownership but share information when required for the purposes of law enforcement.

Mitchell and Hodge said they acknowledged “the rigour with which the crown dependencies cooperate with British law enforcement authorities and the HMRC,” but argued that this legal assistance was insufficient.

They pointed to the revelations contained within the Panama Papers and Paradise Papers, published by the Guardian and a consortium of international newspapers, in demonstrating the importance of open scrutiny.

The Panama and Paradise Papers showed the range of ways that rich people can exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates known to have been using offshore tax havens, as revealed in the Panama Papers leak from the company formation agents Mossack Fonseca.

The MPs conclude: “Any suggestion regarding the effectiveness of closed registers was completely destroyed by the release of the Panama and Paradise Papers. These showed clearly that without public registers of beneficial ownership it is not possible to join up the dots of corruption and malfeasance.”

The financial services bill is likely to return to the Commons shortly because it is necessary to ensure the continuity of banking regulations in the event of a no-deal exit from the EU.