31/03/2014 13:06 BST | Updated 31/05/2014 06:59 BST

It's Time to Get Tougher on UK Tax Havens, Mr Cameron

With one important caveat, the UK holds the moral high ground on a major crime-fighting reform recently approved by the European parliament - the creation of public registers of who really owns millions of companies in Europe.

Back in autumn 2013, prime minister David Cameron announced that the UK would be a pioneer and set up its own public list of who ultimately owns the two million plus companies in the UK.

In November, Mr Cameron then urged the same approach on other European countries. In a letter to other heads of government, the European parliament and the European commission, he argued that they must "visibly lead global efforts to strengthen transparency of company beneficial ownership".

He also pointed out that there is "overwhelming evidence behind the need to act" and that "a lack of knowledge about who ultimately owns and controls companies facilitates illicit domestic and cross-border money laundering, corruption, tax evasion and other crimes".

The European parliament has now accepted these arguments and voted to require member states to set up public registers of companies' real, flesh-and-blood owners.

The matter will now go to Europe's ministers, who make up the European Council. If and when Parliament and Council agree, European countries will get registers of who really owns the companies incorporated within their borders.

Without doubt, this will be a problem for anyone who uses companies as a front for nefarious activities. The registers should make it dramatically easier for the police, tax authorities, journalists and potential business partners and customers of the companies in question to know who is ultimately responsible.

However, as Mr Cameron's letter also points out, the criminal abuse of companies is an international problem and can only be fixed if countries pursue similar solutions. Otherwise, companies can be shut down in one country and re-established in another which offers more effective secrecy.

Hence Mr Cameron's argument that European countries should set up public registers of companies' real owners "as the cutting edge benchmark for countries and major financial centres to emulate across the world".

All well and good - but aren't some of those 'major financial centres' ultimately controlled by the UK? Take the British Virgin Islands, the Cayman Islands and Bermuda, for instance, which are among the UK's Overseas Territories.

Between them, these small islands host at least 700,000 companies, some of which have provided powerful evidence of why real owners should not be allowed to hide their identities (corruption, fraud, tax evasion, money laundering and, apparently, horse-meat masquerading as beef).

Admittedly the UK did flex its muscles at the G8 last year, leading the Overseas Territories to agree to consult on whether to create central registers of who owns the companies they host.

But while the PM has subsequently seen fit to harangue his EU counterparts on the issue, the UK government has been noticeably more restrained about the outcome of the Overseas Territories' deliberations.

We don't know what conversations are happening behind closed doors but when he responded to a parliamentary question about the matter, foreign office minister Mark Simmonds replied simply that the islands are consulting on the possibility of creating central registers of companies' owners. He gave no indication of what outcome the UK government favoured.

And when Mr Simmonds visited the Cayman Islands in November 2013, he took a similarly neutral approach. In a speech to the Islands' Chamber of Commerce, he welcomed the consultation before adding : "But this is ultimately a matter for Cayman to decide."

This raises the question of how the UK government would respond, if the Overseas Territories decide against public registers. It would create a curious position in which the UK is publicly seeking to influence the way other countries regulate their companies, while remaining silent on the issue for jurisdictions over which it holds ultimate responsibility.

Of course the UK deserves huge credit for choosing to create a public register of companies' owners in the first place. If implemented in an effective and enforceable way, the register will set an important precedent for the rest of the world to follow. It also gives David Cameron's letter to Europe a lot of credibility.

But what the UK does in relation to its Overseas Territories also affects that credibility. And it affects the lives of people across the world, including in the UK, because the Territories' global financial importance is wildly disproportionate to their tiny physical size. According to Christian Aid research, the British Virgin Islands alone is one of the ten largest sources of foreign direct investment in the world, although it has the 194th largest economy.

So when companies hosted by the Overseas Territories are used by criminals - as countless exposes have revealed to be the case - people across the world suffer the consequences as their governments are denied vital revenue for combating poverty.

In short, Mr Cameron, your leadership on this issue and your advocacy to your European Union counterparts is welcome. But we have yet to square the circle when it comes to the Overseas Territories. In the interim, we anxiously await the outcomes of their consultations.