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British MPs try to force Overseas Territories to open up company registers

May 1, 2018

British Members of Parliament from both major parties are trying to force Britain's Crown Dependencies and Overseas Territories to open their registers of company beneficial ownership to the public, by pushing through an amendment to a bill currently in its final Parliamentary stages.

According to the Guardian newspaper and BBC News, 19 Conservative back-bench MPs and a much larger number of Labour opposition MPs have agreed to support the amendment to the Sanctions and Anti-Money Laundering Bill.

 

The amendment would authorise the UK government to issue orders in council against any British jurisdictions that have not made their central registers of company beneficial ownership publicly available by 31 December 2020.

 

Its Conservative backers include Andrew Mitchell and former cabinet ministers Nicky Morgan, Dominic Grieve, Stephen Crabb and Ken Clarke, who claim it is not good enough that the territories' beneficial registers are available to UK authorities. They say the registers should be made public, to allow reporting and discussion of private ownership matters by the media and society. This, they say, is demonstrated by the fallout from the theft of confidential client documents from Panamanian law firm Mossack Fonseca in the so-called Panama Papers affair.

 

Following that incident in April 2016, British Overseas Territories and Crown Dependencies that did not already have registers of company beneficial ownership were ordered to set them up by the previous Conservative-Liberal Democrat administration under David Cameron. Those that did have them were required to make them electronically available to the UK authorities within 24 hours of receiving a request.

 

However, the pressure on these small financial centres has continued. An attempt was made by 88 MPs in February 2017 to force public ownership registers on Overseas Territories. On that occasion, the amendment would have been inserted into the Criminal Finances Bill. However, the then-government had a parliamentary majority and was able to overrule it, insisting that access to the registers by the UK law enforcement agencies is good enough.

The new amendment to the Sanctions and Anti-Money Laundering Bill is also opposed by the Conservative government. However, it no longer holds an overall majority. The rebel group of MPs is, theoretically, sufficiently large to defeat the government when the Bill reaches its third reading in the House of Commons tomorrow, although the Conservative MPs in the group may retract if the government offers concessions.

 

British Virgin Islands premier Orlando Smith said passage of the amendment would undermine the constitutional relationship between the BVI and the UK. 'We reject the idea that that our democratically elected government should be superseded by the UK Parliament, especially in an area which has been entrusted to the BVI people', he said. 'This flies in the face of constitutional arrangements made with the UK when our new constitution was approved in 2007.'

 

He stressed that the BVI's recently introduced Beneficial Ownership Secure Search System ensures that verified and current beneficial ownership information is directly and immediately available to BVI competent authorities. The BVI would, he said, be willing to make its company ownership register public, but only if public registers become the global standard adhered to by competing international financial centres. As yet, the UK is the only jurisdiction in the world to have done so.