The British Virgin Islands has opened part of its long-guarded corporate registry to outside scrutiny, but anti-corruption advocates say the new transparency rules contain loopholes that could let bad actors hide ownership information and undermine investigations, according to an OCCRP report.

Under regulations that took effect Wednesday, BVI authorities can order registered agents to provide corporate information after reviewing a request. But the rules also require that a company’s registered agent be notified whenever such a request is made, a provision critics say could tip off subjects of investigations and expose the identities of journalists, researchers, and civil society groups seeking the records, OCCRP reported.

Transparency International and other advocates say that notice requirement strips away the element of surprise that makes beneficial ownership disclosure useful in corruption and money-laundering inquiries. Margot Mollat, a senior researcher at the group’s UK chapter, told OCCRP that a system that alerts company owners when their information is accessed is incompatible with global transparency efforts and could create a chilling effect on public-interest reporting.

“Companies registered in these Overseas Territories have been used to hide billions of pounds from corruption and embezzlement, avoid sanctions, or launder money linked to drugs, human trafficking, and illegal deforestation,” she told OCCRP.

The new rules mark a break from the British Virgin Islands’ longstanding practice of strict corporate secrecy, which helped make the territory a favored jurisdiction for tax evasion and other illicit financial activity. But access remains limited. 

According to OCCRP, applicants must pay a $75 fee and present credible evidence that their request serves the public interest, such as preventing financial crime. Authorities will disclose information only for individuals with at least a 25 percent stake in a business, including their full legal name, nationality, birth month and year, and level of control.

Companies would also have five business days to object after being notified of a request, potentially triggering an appeals process that can halt disclosure, according to the report. The rules also allow companies to seek advance privacy exemptions if disclosure could expose owners to risks such as kidnapping, extortion or violence.

Documents from the BVI Financial Services Commission showed the offshore sector had pushed for an even longer objection period of 10 to 21 days, citing concerns about media access, the news organization said. 

Read more at OCCRP