Overseas territory risk warning
Friday, 16 Nov 2007 07:38
British sovereignty of its overseas territories comes with liabilities
The Foreign Office should do more to mitigate the risks caused by the UK's overseas territories, a National Audit Office (NAO) report has concluded.
Britain has responsibility for 14 overseas territories which, though autonomous, remain under UK sovereignty. These vary from the prosperous Bermuda and Cayman Islands to the financially-dependent St Helena, Pitcairn and Montserrat.
The NAO report says weak governance and accountability in the territories affects the UK's oversight of risk, while limited resources and administrative arrangements also have a negative effect.
It acknowledges that progress has been made in mitigating the risks of dependence on disaster management and internal security, but warns against complacence in offshore financial services regulation to combat money laundering and terrorist financing.
Meeting international standards in tackling the latter is "critical", the report notes, before expressing concern that establishing practices to comply with such standards has "proved difficult".
It adds that there have been some successes, however, most notably through the British Virgin Islands' Financial Intelligence Agency.
"The UK government has a responsibility to ensure the security and good governance of the overseas territories, and I'm encouraged by areas of progress made in the last ten years," NAO head Sir John Bourn said.
“Though they share many challenges the overseas territories are a very diverse group. There is more that can be done to help all territories consistently reach the best standards already to be found among them."
The Foreign Office did not issue a response to the report prior to its publication.