Crown Dependencies plan public beneficial ownership registers

Jersey, Guernsey and the Isle of Man have agreed to set up public beneficial ownership registers to improve transparency of company and trust ownership in line with EU efforts to clamp down on money laundering and tax evasion

In a joint statement, the three British Crown Dependencies announced proposals for each jurisdiction to set up a register of beneficial ownership, which will provide information on locally registered companies, and would share information in line with the principles of the forthcoming EU Fifth Money Laundering Directive, which is currently out for review.

The ownership registers are likely to come on line from 2022, by which time the Fifth Money Laundering Directive would be in force across EU member states. Guernsey, Jersey and the Isle of Man do not currently publish information about the real owners of companies incorporated there.

‘The commitment will increase transparency and accessibility, while maintaining high standards of accurate, up-to-date, verified information’, the joint statement said.

Chief minister of Guernsey, deputy Gavin St Pier, said: ‘Guernsey has stated repeatedly that we would move to a public register of beneficial ownership as that becomes an international norm. We are publishing a detailed action plan to demonstrate how Guernsey will respond to global developments in regard to beneficial ownership over the next couple of years.

However, the states expressed concerns about the quality of data provided on ownership and called for robust verification of information to ensure the data was transparent and not open to fraud.

 ‘The action plan reinforces our message that it is for Guernsey to determine its own policy position. We will never compromise the high standard of our register, which is populated by verified up-to-date data, by the adoption of an inferior model. Our action plan will ensure that our register and corporate regulation continues set a standard for larger jurisdictions to follow,’ St Pier added.

The three jurisdictions have been under increasing pressure to extend their current ownership registers especially with the tightening of the rules under the proposed Fifth Money Laundering Directive, which requires all EU member states to improve transparency of ownership to clamp down on tax evasion, money laundering and terrorism funding, and provide public access to the information.  

The proposals, announced 18 June, will see greater levels of transparency and are likely to be introduced in 2022:

  • the interconnection of the islands’ registers of beneficial ownership of companies with those within the EU for access by law enforcement authorities and financial intelligence units; 
  • access for financial service businesses and certain other prescribed businesses for corporate due diligence purposes;
  • public access aligned to the approach taken in the EU Directive.

In March, the UK government delayed proposed amendments to the Sanctions and Anti-Money Laundering Act 2018, which would have seen the extension of UK wide rules on registration and would have required British Crown Dependencies and Overseas Territories to set up ownership registers.

At the time, economic secretary to the Treasury, John Glen, told MPs that the extension would not happen until 2023, despite original expectations of a launch date of 2021.

Transparency International UK welcomed the announcement but called for greater clarity about a timeframe for the launch of the public registers of ownership.

Duncan Hames, director of policy at Transparency International UK, said: ‘We welcome this decision by the Crown Dependencies to acknowledge the place transparency has in the fight against illicit wealth. The secrecy made possible by laws in Britain’s Crown Dependencies has allowed corrupt individuals to steal from their people and enjoy the proceeds of these crimes – often with impunity.

‘When it comes to ensuring these registers become an effective tool to tackle money laundering, the devil will be in the detail. There is currently a lack of clarity as to when they will become public and what form they will take when they do so. If the British Crown Dependencies truly want to show global leadership, they will need to accelerate these plans to be among those at the forefront of the fight against financial crime, rather than following some years behind in the footsteps of EU member states.’

However, the move marks an acceptance by the Crown Dependencies that transparency of ownership is now a priority for governments.

Chief minister of the Isle of Man, Howard Quayle MHK, said: ‘It is in all our strategic interests as responsible jurisdictions to commit to further developing the accessibility and transparency of our register of beneficial ownership for companies. The EU’s review in 2022 gives us the opportunity to follow best practice and implement a register that meets the principles of the Fifth Money Laundering Directive.’

Jersey's external relations minister, Senator Ian Gorst said: ‘We hope to encourage other jurisdictions to raise their own standards, particularly in relation to the verification of data and the regulation of the financial services sector.’

Sara White

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