Tuesday, March 05, 2019

More undemocratic colonialism

If you're looking for a list of villains in the early 21st century, the British dependencies of Jersey, Guernsey and the Isle of Man are somewhere on it. They're notorious tax havens, vehicles for tax cheats, corrupt officials and other criminals to launder their money, and so responsible for a decent whack of international evil. UK MP's decided to fix this by requiring them to introduce public beneficial ownership registers - which forced the government to withdraw the key Brexit bill they were using for this purpose:

Ministers have pulled a financial services bill from the House of Commons, fearing the government was almost certain to be defeated on an amendment requiring Jersey, Guernsey and the Isle of Man to clamp down on money laundering.

The Conservative MP Andrew Mitchell and Labour’s Margaret Hodge want the crown dependencies to introduce public share ownership records by December 2020, which the three territories resist.

Mitchell said the government had pulled the bill “in face of certain defeat” because it was backed by a group of rebel Tories as well as Labour and the other opposition parties. The former cabinet minister added, however, that the amendment would be put to a vote whenever the bill was resubmitted.

Hodge said the government had taken an “outrageous step” in pulling the bill because “they knew we commanded a majority. I hope the government will accept our proposals, but if not, we will continue to campaign for public registers.”

I support public beneficial ownerhsip registers. But as with efforts to legislate for former British colonies, this oversteps the constitutional mark. These dependencies are self-governing, with their own elected legislatures, and the UK government has agreed not to legislate on their domestic affairs without their consent. But I guess that's the problem with former imperial powers: they don't recognise where their country stops and someone else's begins.

So what should the UK do about its criminal statelets? Economically blockade them. The selling point of these tax havens is that they have privileged access to the UK and EU economies. And that's something the UK parliament does have power over. Making that access contingent on adopting proper anti-money-laundering standards, including a public beneficial ownership register, is both reasonable and formally respects the dependencies' control over their own domestic affairs. And if the dependencies don't like it, they can always find some other outlet for their laundered cash.