Enjoy this article from STEP:
“The UK’s House of Lords is being urged to reject opposition amendments to the UK’s Criminal Finances Bill 2017, which would force British Crown Dependencies and Overseas Territories (CDOTs) to establish publicly accessible registers of company beneficial ownership as early as 2019.
The Bill is now passing through its final stages in parliament. It contains several measures of importance to the financial sector, including a new extraterritorial corporate criminal offence of failing to prevent the facilitation of tax evasion, much stronger money-laundering reporting requirements, and a new power for the UK authorities to issue ‘unexplained wealth orders’ requiring individuals to declare the source of their wealth – or risk forfeiting it.
Attempts have been made to add more controversial measures to the Bill. In February 2017, for example, a group of 88 MPs tabled an amendment aimed at forcing British Overseas Territories to make their company ownership registers public by 2019, and to require Crown Dependencies to report on the progress that they had made toward that goal by the end of 2018. Both amendments were formally withdrawn during the House of Lords debate of the Bill on 3 April 2017, after the government spokesperson, Baroness Williams, expressed opposition to forcing the CDOTs to adopt public registers unless they become a ‘global standard’.
Baroness Williams told the House of Lords that the best way to advance standards in the CDOTs was through cooperation and consensus, by persuading both the CDOTs and international standard-setters. She also noted that the UK government was opposed to adopting differing standards in the Overseas Territories and the Crown Dependencies – the UK government would aim for them to move together, but only as, and when, a global standard had emerged.
Jersey Finance is concerned that further attempts to push the amendments will be made at the next stage of the bill on 25 April 2017. Since 1989, says Jersey Finance’s Chief Executive, Geoff Cook, information on the ultimate beneficial owners of every company registered in Jersey has been captured. However, that information has only ever been accessible to regulatory authorities, not to the public at large.
‘We have consistently argued that Jersey’s model is robust and reliable because of the way in which information is verified, and that opening the register to public scrutiny would not help combat financial crime’, Cook said in a letter to peers. ‘We believe there is a high risk that persons seeking to use UK companies for criminal activity will not comply with the self-reporting mechanism that underpins the UK’s register of persons with significant control (PSC Register). As corporate service providers are not regulated in the UK, verification may occur only through public scrutiny of individual PSC Register entries. Such an approach is sporadic at best, and those who intentionally provide incorrect information to conceal their interests will be confident of remaining undiscovered.’
This is an argument that Richard Corrigan, Deputy CEO at Jersey Finance, put forward at a STEP Roundtable held in Jersey in November 2016: ‘The UK register of people with significant control is a system of voluntary self-certification of information, and money launderers do not self-certify with accurate information. So there are defective solutions being introduced to deal with this issue of beneficial ownership and get to the root of financial crime.’ – “
