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Overseas territories 'let down' by govt

01/05/2008

The government must improve its management of Britain's 14 overseas territories, MPs believe.

A report from the Commons' public accounts committee (PAC) says regulation needs to be improved for the territories' financial services industries.

Some, like Bermuda, are major financial centres but investigations and prosecutions of money laundering need to be tightened, the report says.

It adds other more dependent territories, like St Helena, Montserrat and Pitcairn, need significantly improved disaster management planning because of increased risk from climate change and rising sea levels.

"The Foreign and Commonwealth Office is not doing enough to manage the risks arising from the UK's liability for the 14 overseas territories choosing to remain under British sovereignty," PAC chairman Edward Leigh said.

"The FCO should lay down the policing standards expected of the Territories and, together with the Department for International Development, draw up comprehensive disaster management strategies where they do not exist."

Today's report suggests little has changed since last November, when the National Audit Office found more could be done to mitigate the risk from the overseas territories, including that of terrorist financing.

It says financial management is at its strongest in territories dependent on the UK for aid but warns in other cases regulation falls below the standards of Britain's crown dependencies, Jersey, Guernsey and the Isle of Man.

MPs say the government should begin to request money from the better-off territories rather than maintaining its "usual reliance on persuasion" to fulfil its responsibilities.

The Foreign Office said it would comment after the report's publication.