17 May 2018
The United Kingdom’s Crown dependencies (CDs) are facing increasing calls to adopt public registers of beneficial ownership, after British lawmakers voted to compel the overseas territories (OTs) to implement the measures.
British parliamentarians from both the Tory and Labour parties recently voted to make it compulsory for the OTs to implement the registers by the end of 2020, giving the public access to the names of the real owners of firms. The measures, however, do not apply to the CDs.
Over the years, both the OTs and CDs have been accused of promoting corporate secrecy and faced calls to implement public registers. The new order from the UK has reignited fresh calls for the CDs to act.
Tory MP Andrew Mitchell told KYC360: “It’s important that the Crown dependencies follow suit, they share our Queen and trade under our flag. The OTs and Britain share the same values, and so should the CDs,”
“International requirements [are expected] to endorse [public registers] in the coming months and years, but Britain has a reputation for international development, openness and transparency and its important that we lead on this.”
He recently said in Parliament: “I believe that Parliament will expect Her Majesty’s Government to make the point persuasively that we hope that the crown dependencies will embrace the same ethical position and equal transparency, and accept that what is sauce for the goose is also sauce for the gander.”
Anti-corruption campaigners have also renewed the push for the CDs to implement the measures too.
Transparency International spokesman Dominic Kavakeb said: “We very much welcome the first steps Parliament has made to bring about transparency in the British Overseas Territories and hope soon this can be extended to the Crown Dependencies.
“Furthermore we hope that these jurisdictions can bring in public registers off their own backs, before the deadline set by Parliament is reached.”
Ava Lee of Global Witness said while public registers of beneficial ownership in the OTs represents a huge win in the fight against the financial crime, it now raises the stakes for the remaining jurisdictions “which are happy to sell secrecy,” such as the CDs.
“This battle for transparency in the Overseas Territories has been won, but the war isn’t over until the corrupt have nowhere to turn to hide their criminal proceeds.”
The concept of having public registers for the OTs and not the CDs was also criticised by the Cayman Islands Premier Alden McLaughlin, who said: “Imposing such an obligation on the Overseas Territories while exempting the Crown Dependencies discriminates unfairly against the Overseas Territories.”
The Cayman Islands has attacked the overall move by MPs ordering the OTs to implement public registers too, and threatened to take legal action over the matter.
Meanwhile, the CDs – comprising Jersey, Guernsey and the Isle of Man – have affirmed they will uphold the status quo and not implement public registers.
At present, the OTs and CDs are required to reveal beneficial ownership information to law enforcement.
The new plans were endorsed by British parliamentarians through an amendment to the Sanctions and Anti-Money Laundering Bill.
In response to calls for CDs to implement public registers, a spokesman for the Isle of Man said “[Our] central register exceeds current international standards and can provide law enforcement authorities with beneficial ownership information within one hour in urgent cases.
“We take our international responsibilities very seriously and would move towards a public register of beneficial ownership if that becomes the agreed global standard. We believe there should be a level playing field.”
– Irene Madongo
You can claim CPD minutes for reading this article, by signing up to our CPD WalletFREE CPD Wallet