Reforms in tax havens aid sleuths

As opaque networks of secretive companies linking offshore havens with Hong Kong are forced to become more transparent, it will be easier to track down assets hidden in jurisdictions such as the British Virgin Islands (BVI), says William McGovern, a former official with US regulator, the Securities and Exchange Commission.

"There is an uptick in positive signals that we're moving towards greater transparency," said McGovern, now a partner at Kobre & Kim, a US law firm that has worked with US government investigations on fraud, money laundering and corruption.

Following the lead of the Cayman Islands, some of the other so-called UK Overseas Territories, namely Anguilla, Bermuda, BVI, Montserrat and the Turks and Caicos Islands, have agreed to much greater transparency of accounts held in those jurisdictions, the website of Britain's Treasury announced yesterday. These jurisdictions have agreed to automatically exchange information with Britain, France, Germany, Italy and Spain, while the Isle of Man has also agreed to join this multilateral sharing of information, said the Treasury.

Britain, along with other countries involved, will be automatically given much greater information on bank accounts held by their taxpayers in these jurisdictions, including names, addresses, dates of birth, account numbers, account balances and payments into those accounts, according to the Treasury.

By the first quarter of next year, BVI would reform its laws against money laundering and terrorist financing, BVI Prime Minister D. Orlando Smith said recently.

Most of Hong Kong's offshore business was conducted through BVI and Cayman Islands, said John Bruce, Macau director of Hill & Associates, a Hong Kong risk consultancy.