Britain’s overseas territories, including the tax havens of Cayman Islands, British Virgin Islands, and Bermuda, must introduce publicly accessible registers of the beneficial ownership of companies located in their jurisdictions before 2021 or the UK will require them to do so, a law approved by UK Parliament May 1 says.
The new provision, added as an amendment to the Sanctions and Anti-Money Laundering Bill in the House of Commons, states that the UK Secretary of State must provide all reasonable assistance to British Overseas Territory governments to enable them to establish a publicly accessible register of the beneficial ownership of companies registered in each government’s jurisdiction.
The law further states that the Secretary of State must, no later than 31 December 2020, prepare a draft Order in Council requiring the government of any British Overseas Territory that has not introduced a publicly accessible register of the beneficial ownership of companies within its jurisdiction to do so.
Dame Margaret Hodge MP and Conservative MP Andrew Mitchell led the push for the amendment.
A “great leap forward”: Govt accepts my amendment to introduce public registers of beneficial ownership in the Overseas Territories – something NGOs and anti-corruption campaigners have been demanding for years #SanctionsBill #SAMLBill #TackleTaxHavenshttps://t.co/q64U9zLO1m
— Margaret Hodge (@margarethodge) May 1, 2018
The move was immediately hailed by tax justice and anti-corruption groups.
“More than sixty years of UK policy of paying for the overseas territories by letting them be tax havens has come to an end, They will not be havens anymore. Their secrecy has been shattered,” said prominent tax campaigner Richard Murphy.
Murphy noted that the Crown Dependencies of Jersey, Guernsey, and the Isle of Man were not covered by the new transparency measure. He predicted that this will change though, as all three face potential blacklisting at the EU level as non-cooperative jurisdictions and because the UK will likely “arm-twist” them into becoming more transparent.
Cayman Islands Premier Alden McLaughlin, on the other hand, condemned the new measure, saying that his government was “deeply aggrieved” by the passage of the amendment.
“Imposition of legislation, through powers that date back to the colonial era, over and above the wishes of the democratically elected legislative bodies of the Overseas Territories represents a gross affront to the constitutional relationship we currently have with the United Kingdom. Further, imposing such an obligation on the Overseas Territories while exempting the Crown Dependencies discriminates unfairly against the Overseas Territories. This amendment is based solely on prejudice and a wilful [sic] misunderstanding of our current regulatory framework,” the Premier said in a statement.
Premier of the British Virgin Islands, Dr. Daniel Orlando Smith, also condemned the new measure. Smith said it was wrong for the will of the BVI’s’ democratically elected government to superseded by the UK parliament. In the absence global standards, any imposition by the UK is unfair and discriminatory and will result in a material loss of jobs and revenue in the territory, Smith said.
The new law will apply to all overseas territories listed in Schedule 6 of the British Nationality Act 1981, namely, Anguilla; Bermuda; British Antarctic Territory; British Indian Ocean Territory; British Virgin Islands; Cayman Islands; Falkland Islands; Gibraltar; Montserrat; Pitcairn Islands; Saint Helena, Ascension, and Tristan da Cunha; South Georgia and the South Sandwich Islands; Sovereign Base areas of Akrotiri and Dhekelia; and Turks and Caicos Islands.
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