On 1 May, the UK House of Commons backed an amendment to the anti-money laundering bill, meaning British Overseas Territories (BOTs) must introduce public registers that disclose who owns the assets in companies registered in each jurisdiction.
BOTs have lashed out at the amendment, saying it is “constitutional overreaching” and “unacceptable modern colonialism”.
A similar second amendment had also been tabled last week that would have forced the crown dependencies of the Isle of Man, Jersey and Guernsey to also introduce public registers of beneficial owners.
However, this amendment was withdrawn just hours before the House of Commons voted on updating the bill.
Richard Murphy, tax transparency campaigner and director at Tax Research UK, told International Adviser he believes the dependencies were excluded because there could be uncertainties over constitutional arrangements between the jurisdictions and the UK.
“However, in the case of the overseas territories, it is absolutely unambiguous that the UK can [impose a public register],” Murphy said.
Meetings in London
Isle of Man chief minister Howard Quayle said the withdrawal of the amendment highlights the island’s position as a cooperative jurisdiction.
An Isle of Man Government delegation, lead by Quayle, travelled to London a day before (30 April) the amendment was passed.
“Significant concerns were voiced about the implications of the UK Government legislating for the Isle of Man without its consent during discussions with ministers, MPs and officials in Westminster,” an Isle of Man spokesperson said.
Jersey’s chief minister also travelled on 30 April to London with the island’s external relations minister Philip Bailhache to lobby politicians.
“Following meetings with UK ministers and senior officials [on 30 April], I am reassured that the UK Government recognises both our constitutional position and our strong track record on meeting international standards of transparency,” Gorst said.
Both Quayle and Gorst said the withdrawal shows the UK understands their jurisdictions “constitutional positions”.
In Jersey’s case, Gorst said it “preserves the established historical relationship between Jersey and the United Kingdom”.
While Quayle said it was positive to see the number of MPs who spoke on behalf of the Isle of Man in the House of Commons amendment debate.
“A number of MPs spoke during the debate to acknowledge the importance of the island’s status as a self-governing nation with our own democratically elected parliament and laws.
“There was also recognition of the Isle of Man’s efforts to combat serious financial crime and the fact that our central register exceeds current international standards and can provide law enforcement authorities with beneficial ownership information within one hour in urgent cases,” Quayle said.
All three crown dependencies have said they do not oppose a public register, as long as it is introduced as an international standard.
Guernsey Finance chief executive Dominic Wheatley said, while the jurisdiction is “fully on board” with tax transparency objectives, it also respects confidentiality and an individual’s right to privacy.
“The adoption of a public register was a policy choice for the UK, not an international obligation,” Wheatley said.
“Guernsey chose to build on its own existing good practice by establishing a central register of beneficial ownership of legal persons in the summer of 2017. The information held on Guernsey’s register is up to date and accurate, verified and regulated,” Wheatley said.
Matter of time
Despite the amendment being withdrawn, Murphy told IA he believes the crown dependencies will be forced to eventually follow suit.
“I think there could be a private members bill, or another amendment the government might put forward to make them comply.
“I don’t think the UK is going to put up with the overseas territories having one standard and the crown dependencies having another,” he said.