Unmasked: tycoon in tax haven secrets row

Threat: The ECJ backed jet firm tycoon Patrick Hansen

A Luxembourg businessman has been unmasked as the prime mover behind a controversial legal victory which is threatening Britain’s efforts to fight tax haven secrecy. 

Patrick Hansen, whose private jet firm has counted wealthy Russians among its clients, was one of a small group that brought the case. His success could allow companies based in territories, including the British Virgin Islands and the Channel Islands, to keep their owners’ identities hidden. The ruling by the European Court of Justice – the EU’s highest court – flies in the face of Britain’s efforts to root out shell companies. 

Britain had hoped that access to ownership records would help to combat financial crime and terrorism. But Hansen, named in court papers only as ‘WM’, teamed up with a company called Sovim SA, registered in Luxembourg. They successfully argued that a public registry in Luxembourg would expose company owners to risks of ‘fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation’. 

The ECJ ruling has infuriated campaigners who are shocked a court would side with tax haven bosses over the interests of public transparency. 

It is also likely to enrage those who fought to leave the European Union, only to have the ECJ bulldoze years of work by UK Ministers and dictate the behaviour of Crown Dependencies and Overseas Territories. Moran Harari, of the Tax Justice Network, said: ‘We urge EU governments to not accept a return to the dark ages of dirty money.’ 

Under pressure from Ministers, Overseas Territories such as the BVI and Bermuda, along with Crown Dependencies including Jersey and the Isle of Man, had promised there would be unrestricted public access to ownership records. 

Hansen runs a private jet charter business called Luxaviation. Several of its planes were grounded earlier this year after Moscow’s invasion of Ukraine triggered sanctions against Russian oligarchs. 

Recently discovered secret documents show that Hansen owned a holding company in the BVI with activities in Luxembourg, Cyprus and Russia, according to the International Consortium of Investigative Journalists.

All of the offshore financial centres contacted by the MoS said they were considering the judgment even though they are governed by UK – not EU – law. 

The former finance minister of one major offshore jurisdiction, Bob Richards, welcomed the ruling, saying: ‘This is good news for Bermuda.’ 

A BVI-based lawyer specialising in asset recovery in fraud cases also backed the judgment. Martin Kenney said: ‘Public… registers are an affront to the right to privacy. 

‘They also rarely have the intended effect of increasing effective enforcement.’ 

Dame Margaret Hodge, joint chair of the All-Party Parliamentary Group on Anti-Corruption and Responsible Tax, said it would be ‘outrageous’ if tax havens used the ruling ‘to turn back the clock on transparency’. 

‘This country already has the dubious honour of being the jurisdiction of choice for dirty money,’ she said. ‘We need to hear a strong commitment to bring an end to this.’ 

Duncan Hames, Director of Policy at Transparency International UK, said: ‘Opaque companies in Britain’s Crown Dependencies and Overseas Territories have been used to facilitate economic crime on a global scale.

‘Britain’s offshore financial centres can still choose to end their role as destinations of choice for criminals. They should still make good on their commitment to open up their company registers by the end of 2023.’ 

Campaigners argue that corporations registered in such locations can be used to hide assets and avoid tax. Publicly available information sometimes fails to disclose the names of the legal owners of companies. 

A leak of documents known as the Paradise Papers in 2017 revealed that many celebrities were making extensive use of tax havens. Those named included Formula 1 racing driver Lewis Hamilton, singers Madonna and Bono and disgraced film producer Harvey Weinstein. 

A second Economic Crime Bill going through Parliament will force company owners to publicly verify their identity. 

The Mail on Sunday contacted Hansen for comment.

This post first appeared on Dailymail.co.uk