On 1 May 2018 the amendment to Sanctions and Anti-Money Laundering Bill was introduced in the Parliament of the United Kingdom. This amendment provides that the Overseas Territories of the UK will have to establish publicly available registers of beneficial owners of legal entities incorporated in such jurisdictions.
In accordance with the provisions of Sanctions and Anti-Money Laundering Bill (the Bill) the authorities of all Overseas Territories shall establish the legislation that permits public access to registers of beneficial owners in such jurisdictions, as well as approve the form of those registers. All necessary procedures are to be completed before 31 December 2020.
Currently 14 jurisdictions comprise the list of Overseas Territories of the UK, including Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Montserrat, Turks & Caicos. The UK plans to oblige all these jurisdictions to implement public availability of registers of beneficial owners of legal entities.
However, the Bill shall be applicable only to Overseas Territories of the UK, but not to Crown Dependencies (Jersey, Guernsey and the Isle of Man).
The aim of establishment of public availability of registers of beneficial owners in jurisdictions controlled by the UK was proclaimed as the prevention of money laundering and terrorist financing. Some of these jurisdictions are offshore, so they are considered to be of high risk and presumed as favorable environment for money laundering schemes.
The discussion that took place in the House of Commons, has resulted in the majority of votes “for” this particular legislative initiative. It is necessary to mention that such votes “for” were both from the Conservatives (the ruling party) and from the Labor (the opposition) representatives in the House of Commons. Alan Duncan, the Minister of State for Europe and the Americas at the Foreign & Commonwealth Office, has expressed the position of his office that agree to pass the Bill with proposed amendments. His opinion is that the UK is reluctant to dictate its will to the public authorities of the Overseas territories, but the results of the discussion that took place in the House of Commons make it clear that the establishment of publicly available registers of beneficial owners is a necessary measure.
On the other hand, representatives of some Overseas Territories disagree with the actions of the UK in forcing them to establish publicly available registers of beneficial owners. In particular, Jude Scott, CEO of Cayman Finance, said that “The House vote is a vain attempt to fight global problems like corruption and tax evasion by unfairly discriminating against a few jurisdictions – requiring public registers from Overseas Territories but not Crown Dependencies, for example. Global problems require global solutions and standards that apply to all jurisdictions”.
David Burt, the Prime Minister of Bermuda, is also against the legislative initiative discussed in the UK. According to his opinion, the actions of British Parliament are “backwards step” in the relationships between the UK and its Overseas Territories and the “return to base colonialism”. He said the Bill fails to acknowledge Bermuda’s long history of full internal self-government, and that his government will take the necessary steps to ensure Bermuda’s Constitution is respected.
Orlando Smith, the Prime Minister of the British Virgin Islands stated: “As a constitutional democracy, the BVI believes in the rule of the law. According to the rule of law and our constitution, the fundamental rights of privacy of all citizens and corporate entities will be protected and upheld”.
Some statements against the forced implementation of publicly available registers of beneficial owners derive from the following circumstances:
- Technical difficulties and expensiveness of necessary procedures caused by the hurricane Irma that took place in Caribbean Sea, that sufficiently damaged some countries and territories infrastructure (including BVI);
- Information from the registers of beneficial owners may be provided to security organizations and other law enforcement agencies if necessary, otherwise it is confidential;
- The possible outflow of money from the jurisdictions controlled by the UK to other jurisdictions that are not transparent and cooperative that will make obstacles to observe the money transfers, including those of criminal sources.
The Bill will be passed finally after one more step of legislative process, the mutual agreement on amendments by both chambers of British Parliament, House of Commons and House of Lords. Afterwards the Bill will be signed by the Queen and will enter into force.