Islands object to beneficial ownership proposals

Posted: 04/03/2019

Dame Margaret HodgeThe governments of Jersey, Guernsey and the Isle of Man have raised strong objections to amendments being debated in the UK's Parliament today, which could lead to parties owning more than 25% of any company registered in the Crown Dependencies being made public.

The proposed amendments to the UK's Financial Services (Implementation of Legislation) Bill are being debated today as part of Brexit legislation negotiations. Conservative MP Andrew Mitchell and Labour’s Dame Margaret Hodge (pictured) are demanding that the Crown Dependencies introduce public registers by the end of 2020.

The amendment has significant support from Labour, the Scottish National Party and the Liberal Democrats, as well as Conservative MPs including Ken Clarke, Dominic Grieve and former Brexit Minister David Davis. 

Islands' objections

A statement from the islands issued over the weekend said: "We are not represented in the UK Parliament, and it is a respected constitutional position that the UK does not legislate for the Crown Dependencies on domestic matters without our consent. 

"The proposed amendments are contrary to the established constitutional relationships that exist between the United Kingdom and each of the Crown Dependencies and, if passed, would produce inoperable legislation.

"The proposed amendments attempt to impose public registers of beneficial ownership for all Crown Dependencies and Overseas Territories. We also consider the legislation to be wholly unnecessary in the context of our robust existing approach to the retention and sharing of beneficial ownership information. 

"All Crown Dependencies are committed to the highest standards of financial services regulation and transparency. Our jurisdictions are parties to Exchange of Notes for Beneficial Ownership information with the UK and are committed to the aim of exchanging adequate, accurate and current information on beneficial ownership to help combat tax evasion, money laundering and corruption. These arrangements were reviewed in 2018 and found to be effective; the 2019 review is under way.

"The standards applied by our jurisdictions exceed those of the United Kingdom, the registers in the Crown Dependencies contain information that is accurate and up to date. The Crown Dependencies cannot support any step that would adversely impact the effectiveness of our beneficial ownership registers, dilute the commitments we have made to transparency or reduce the robustness of our regulation.

"We are proactively engaging with the UK government and parliamentarians to address these concerns, providing focus on the importance of rejecting these amendments for the Crown Dependencies, in the wider context of the business before the UK Parliament this month."

The Chief Ministers of all three jurisdictions are holding meetings in London today on this matter.

Last-minute parliamentary change

Jonathan Reynolds MP, who supports the amendments, has tweeted: ‘The Govt have pulled the Financial Services Bill from the business today. There were amendments on preventing a "race to the bottom" on financial deregulation and on transparency for the Overseas Territories and Crown Dependencies that we had hoped to pass.’


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