Eight of the UK’s overseas territories have committed to introducing publicly accessible registers of company beneficial ownership within the next three years as part of attempts to improve financial transparency, leaving the British Virgin Islands (BVI) as the only significant financial centre still to do so
In a written statement to Parliament, Baroness Sugg, Minister for the Overseas Territories and Sustainable Development, said: ‘The eight territories – Anguilla, Bermuda, Cayman Islands, the Falkland Islands, Montserrat, the Pitcairn Islands and St Helena, Ascension Island and Tristan da Cunha, and the Turks and Caicos Islands – have all demonstrated good progress and political leadership as part of the global effort to increase transparency in financial services and tackle illicit finance.’
The move follows an earlier announcement made by the crown dependencies to implement publicly accessible registers of company beneficial ownership within the next few years, and the establishment of a publicly accessible register by Gibraltar in March this year, in line with the EU’s Fifth Anti-Money Laundering Directive.
Sugg said: ‘In line with the Sanctions and Money Laundering Act 2018 the government will prepare a draft Order in Council before the end of 2020, which will be published.
‘We hope that the British Virgin Islands will also commit to publicly accessible registers of company beneficial ownership without delay.’
The government expects that beneficial ownership information on businesses registered in the overseas territories will be accessible to the public by 2023.
The move to make registers compulsory and public had been strongly opposed by the overseas territories, who claimed it amounts to constitutional interference, adds compliance costs and is a threat to the local economies which are dependent on the financial sector.
Dominic Raab, Foreign Secretary, said: ‘This is an important step forward by governments from across the overseas territories. I welcome the leadership to improve corporate transparency, and the message it sends about the need to tackle illicit finance globally.
‘The UK government has led an international campaign to make such registers a global norm by 2023 and is hopeful the only remaining permanently inhabited territory not to make an announcement, the British Virgin Islands, will make a similar commitment soon.
‘The FCO is continuing to work with their government in encouraging them to take this action.’
The UK government already has arrangements with the overseas territories whereby they provide UK law enforcement authorities access to information on the ownership of companies in their jurisdictions, but this data is not made available to the public.
The BVI has developed an electronic search portal, the beneficial ownership secure search system (BOSSs), which provides BVI authorities with a database of information on BVI companies, which it uses to share information with the UK under the Exchange of Notes on Beneficial Ownership legislation signed in 2016.
Andrew Fahie, BVI Premier and minister of finance, said: ‘The government of the Virgin Islands continues to be very pleased that UK law enforcement, including the National Crime Agency, continues to find this arrangement effective.
‘The Virgin Islands, in this regard, communicated that this jurisdiction has been deemed largely compliant by the Financial Action Task Force.
‘Beneficial ownership information in the system will also be available to other authorities in the Virgin Islands to ensure that they are able to meet their international obligations. Importantly, the system will not be accessible by the public.’
Fahie highlighted that the BV remains on the white-lists of the OECD and the EU and said the territory had a ‘track record as a cooperative, which other International Finance Centres (IFCs) are seeking to emulate’, and pledged to take ‘informed and nuanced decisions’ about international requirements.
‘The government of the Virgin Islands recognises that the continued success of our financial services industry requires that we continue to align ourselves with those and other standards as they emerge.
‘Not to be overlooked, we are getting closer to significant milestones in the area of publicly accessible registers of beneficial ownership.
‘Against the backdrop of these developments, we are determined that any direction forward must be one that gives BVI the opportunity to do what is best for BVI and in a way that is best for BVI.’ Fahie said.
In a statement the Cayman government said the territory has significantly strengthened and enhanced its beneficial ownership regime through the introduction of a more advanced technology platform for managing beneficial ownership information held centrally, and had enhanced the powers of the beneficial ownership Competent Authority to verify beneficial ownership information, request additional information, and introduce penalties for non-compliance.
The Cayman government said: ‘An administrative fines regime has been introduced with a breach in beneficial ownership obligations incurring a $5,000 fine, with a further $1,000 penalty every month until the issue is rectified. Where there is non-payment for 90 days, the BO Registrar has powers to strike the company off the register.’