'The Government has made a seismic shift in tax transparency and anti-money laundering' says Gary Gardner, tax risk and dispute resolution partner at Blick Rothenberg.
Gary said, 'The Government will now support an amendment to introduce public ownership registers in Britain’s overseas territories.'
He added, 'The Government initially resisted the amendment despite the revelations from the Panama, Bahamas and Paradise papers and, more recently, the furore over the horrific events in Salisbury and the suggestion of an unchecked flow of illicit funds from predatory states and organised crime through the UK’s overseas territories and into the UK.'
Margaret Hodge MP (Labour), closely supported by Andrew Mitchell MP (Tory), tabled and orchestrated the amendment in a rare instance of cross-party support against the government to put a stop to the traffic of illicit funds through the UK’s overseas territories.
The amendment to the new UK anti-money laundering laws will require the 14 overseas territories including; Bermuda, Gibraltar, Cayman, Montserrat to operate public registers of the beneficial ownership of companies, regardless that they have lobbied and fought hard to resist this.
The overseas territories already have ‘closed’ registers of beneficial ownership of companies (and other legal entities such as trusts) but these are only open to law enforcement agencies on request meaning little or no accountability for the effectiveness and accuracy of the register and the standards of regulation required to ensure compliance.
Gary added, 'In contrast the new public registers of ownership will be open to law enforcement agencies, journalists, academics and researchers although not all, despite the name, are open to the general public. Governments across the world accept that the ‘openness’ of public registers opens them to a degree of scrutiny and verification by investigative journalists, Non-governmental-organisations and charities and others that ensures the integrity and accuracy of the information therein. Closed registers do not achieve this and most EU countries will be moving to public registers and it seems very likely that the Crown Dependencies of Jersey, Guernsey and the Isle of Man will need to fall in line.'
'There are cases where privacy is desired for legitimate reasons and genuine cases of people fearing extortion or kidnap and they can apply to be exempted from UK’s existing public register and it is likely that similar exemptions will be a feature of the public registers in the Overseas Territories when put in place in 2020. Whether this poses an existential problem for the economies of the territories remains to be seen but the trend for transparency will prevail.'
For more information, please contact Gary Gardner.