Bermuda, the Cayman Islands and the British Virgin Islands — notorious offshore tax havens where shell companies shield billions of dollars in illicit money — will soon have more open corporate records than Canada.

In a stunning move last week, Britain’s House of Commons passed legislation that will lift generations of corporate secrecy in its offshore territories by compelling company owners registered on the islands to reveal themselves in public databases.

That kind of transparency is only an idea in Canada, where corporate owners can mask their identity behind lawyers and “figurehead” directors. There is no requirement for real company owners — or “beneficial” owners — to list their names in provincial or federal registries.

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“The U.K. is becoming the global leader for beneficial ownership transparency and holding tax havens to account,” said Richard Leblanc, a professor of corporate governance at York and Harvard universities.

“Canada is rapidly being left behind, in a race to the bottom, and now has an unenviable international reputation as the go-to country for lax beneficial ownership transparency laws.”

Despite a recent commitment from the provinces to start collecting beneficial ownership data (without making it public), it is still possible in Canada today to register a corporation, open a bank account and send and receive money overseas all without disclosing your name.

“(The U.K.) vote is good news for the protection of human rights and democracy across the globe, and bad news for tax dodgers, money launderers and kleptocrats,” said Markus Meinzer of the Tax Justice Network, an international group of economists that has been waging a campaign against tax havens for years. “The risks for dirty business ending up in bright daylight is increasing.”

Britain’s transparency crackdown came in the eleventh hour of debate on an anti-money-laundering bill when a pair of MPs from both sides of the House proposed amendments that addressed — head on — long-held British sensitivities around offshore tax haven jurisdictions.

Labour party MP Margaret Hodge and Conservative MP Andrew Mitchell co-sponsored the amendment that would give the British overseas territories until Dec. 31, 2020, to prepare their own public beneficial ownership registries.

Mitchell told the House of Commons that the justification for such a move was made “elegantly but passively” by the Panama Papers and the Paradise Papers, massive data leaks that revealed the true owners of thousands of offshore companies.

“It is only by openness and scrutiny by allowing charities, NGOs and the media to join up the dots that we can expose this dirty money and those people standing behind it. Closed registers do not begin to allow us to do it,” Mitchell said.

More than half of the 214,000 offshore companies named in the Panama Papers were based in the British Virgin Islands. Seventy per cent of the 25,000 offshore corporations in the Paradise Papers were incorporated in Bermuda and the Cayman Islands.

Canadians have stashed at least $90.5 billion in these three U.K. tax havens alone, according to Statistics Canada.

The Star was the only Canadian newspaper among a group of international media outlets that had access to the Panama Papers and Paradise Papers leaks. The Star has published dozens of stories about offshore tax avoidance and evasion over the past two years highlighting Canada’s growing international reputation as a secrecy jurisdiction that attracts dirty money from around the world.

Canada’s corporate secrecy has inspired the international practice of “snow washing” — hiding suspect transactions, money laundering and tax evasion behind the country’s reputation for respected financial oversight institutions and a solid economy.

“We know from the Panama Papers that Canada is actively marketed as a tax evasion jurisdiction,” said James Cohen, a spokesperson for Transparency International Canada. “This new law makes us even more vulnerable to that … We’re left exposed. We’ll become a bigger target for dirty money because of the legal loopholes that exist.”

A recent report by Transparency International ranked Canada and South Korea the lowest in the G20 for financial transparency. Since committing to increase transparency in 2014, Canada has not improved its regulatory framework, the report said.

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“It is concerning that the overall legal framework of Canada and South Korea is still considered ‘weak,’” the report said. “In Canada, the 2015 national risk assessment highlights the use of shell companies by criminal groups and individuals to launder money, and identifies real estate agents and developers as being exposed to high or very high money laundering risk.”

The U.K. move (which doesn’t apply to Crown dependencies such as the Isle of Man, Jersey and Guernsey) is being resisted by the British overseas territories, which assert their independence.

Cayman Islands Premier Alden McLaughlin called the new law “a gross affront to the constitutional relationship we currently have with the United Kingdom.”

“This amendment is based solely on prejudice and a wilful misunderstanding of our current regulatory framework,” he said in an official statement.

In another statement, Bermuda Premier David Burt said: “This attempt to legislate for Bermuda from London is a return to base colonialism and is an action that has no place in 2018.”

The British Virgin Islands, which received more than 80 per cent of its government revenue in 2015 from the incorporation of offshore companies, has a lot to lose.

In a press release, Premier Orlando Smith objected to the law on privacy grounds: “As a constitutional democracy, the BVI believes in the rule of the law. According to the rule of law and our constitution, the fundamental rights of privacy of all citizens and corporate entities will be protected and upheld.”

The U.K. overseas territories say they are considering their legal options to challenge the imposition of the law.

“The Cayman Islands has its own democratically elected government and is not represented in the U.K. Parliament. The actions of the House of Commons in seeking to legislate for the Cayman Islands amount to constitutional overreach and are reminiscent of the worst injustices of a bygone era of colonial despotism,” McLaughlin said.

Despite the fact that public corporate registries have been introduced, or will be introduced, in more than two dozen countries, including the U.K., Norway, Ghana, Kenya, Nigeria, Afghanistan and the entire European Union, McLaughlin argues that public registries are not the “global standard.”

“Since 2013, I have been completely clear that when public registers become a global standard the Cayman Islands will adopt them,” he said.

Martin Kenney, a Canadian anti-fraud lawyer based in the British Virgin Islands, said the public registry model is flawed and will never work because criminals will surely lie rather than put their names in a public database.

“The fact remains they are ineffective and will never work as the crooks will simply continue to bypass the system,” he said. “In contrast, the BVI’s (private) register of beneficial ownership is validated, and therefore accurate and useful for law enforcement agencies responsible for fighting economic crime.”