British Crown Dependencies to Publish Data on Corporate Owners
21 Jun 2019

Guernsey, Jersey and the Isle of Man committed on Wednesday to naming the individuals who own or otherwise control corporations operating in their jurisdictions as part of an effort to meet EU anti-money laundering standards.

Beginning in 2021, the islands will interconnect corporate beneficial ownership registers with similar databases in the economic bloc, allowing law enforcement officials and financial intelligence units to access the information, the governments said in a joint statement announcing a three-tier action plan.

In a second stage starting in 2022, the governments will open access to the registers for financial service businesses and other companies obligated to conduct corporate due diligence for compliance purposes. The registers will eventually be made public following the introduction of legislation permitting the disclosures by 2023, they said.

The plan is intended to align the jurisdictions with standards set by the EU’s Fifth Money Laundering Directive and curtail potential abuses of shell companies and legitimate businesses by money launderers, tax dodgers, terrorist financiers and other financial crooks. The European Union is slated to publish an implementation review of the directive in January 2022.

The initiative follows years of criticism by UK officials that the dependencies’ secrecy laws have likely helped mask illicit finance—an allegation that the three governments have vehemently denied.

Earlier this year, UK members of Parliament sought to amend the country’s Financial Services bill in an attempt to force British crown dependencies and overseas territories to publish corporate beneficial ownership information by 2020.

The lawmakers, who ultimately failed to get the proposals adopted, argued that the UK has the constitutional authority to mandate the disclosures and that reducing the risk of money laundering was a matter of national security.

“Jersey is proud to be among global leaders in matters of tax cooperation, transparency and in combatting money laundering and countering the financing of terrorism,” said Jersey External Relations Minister Ian Gorst, in a statement. “The commitments we are announcing today, alongside Guernsey and the Isle of Man, will help to ensure that this leadership role is maintained whilst taking into account the standards being developed within Europe.”

Gorst also called on “other jurisdictions to raise their own standards, particularly in relation to the verification of data and the regulation of the financial services sector.”

As part of a separate action plan published Wednesday, Guernsey committed to report to its parliament by 2023 on the effectiveness of beneficial ownership registers, both at home and within the EU, and update lawmakers on related global standards and data privacy controls.

Earlier this month, Jersey’s Civil Asset Recovery Fund announced that it had seized over $267 million that had been held in an account maintained for former Nigerian head-of-state Sani Abacha. The funds, which had been frozen since 2014 pending the resolution of legal challenges, were derived from corruption and laundered through the US banking system with aid of Abacha’s son before their eventual transfer to the crown dependency, the government said.

Photo: Andy Hawkins [CC BY-SA 2.0], via Wikimedia Commons

Read more:

The Abacha Case: How AML Procedures Should Have Flagged $267m Earlier

New EU beneficial ownership rules for trusts: good news for offshore?

Jersey agrees to return money laundering assets to Kenya

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