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Labour government would force IFCs to set up public registers

Monday, 9 February, 2015

The leader of the UK's opposition party, Ed Miliband (of the Labour Party), has told Britain's Crown Dependencies and Overseas Territories that he will force them to set up public registers of company beneficial ownership if the Labour Party wins the general election in May.

If they did not comply within six months of the election, he said, he would recommend the OECD blacklist them as 'tax havens'. 'A Labour government is not going to have endless consultation and dithering', he said.

The UK's current Conservative-led coalition government is already pressuring its overseas jurisdictions to set up open registers, although it has not yet created one itself. Legislation has been introduced in Westminster to mandate such a register, but it will not be operational until April 2016 at the earliest.

In the meantime, many of the Crown Dependencies and Overseas Territories have declared that they will not follow suit until rival financial centres do the same. The UK government has not publicly threatened them with blacklisting.

The Conservative Treasury Minister David Gauke pointed out that the UK is the only country in the OECD that has committed to a public central register. '[Miliband] wants the OECD to blacklist countries if they don't do the same as us. But that would mean blacklisting every single country in the OECD apart from the UK – countries like the US, France and Germany.'

Miliband's warning, set out in a letter to heads of all the jurisdictions concerned, provoked critical responses from them.

Bermuda issued a statement expressing 'surprise and disappointment', though it was prepared to discuss 'sharing best practice across borders in areas of corporate transparency'. Gibraltar's Chief Minister Fabian Picardo said Miliband's comments were being used by the Spanish press as a 'rod with which to beat us'.

Guernsey International Business Association Chairman Peter Mills said Miliband 'has clearly not done his research and understood the huge steps that Guernsey and Jersey have taken in the last 15 years or so'.

'Calling for the blacklisting of a jurisdiction that already operates to a higher standard than the UK, and indeed most other countries, will not impress the OECD', commented Jersey Finance Chief Executive Geoff Cook TEP. '[Miliband's statement] sadly seems to bear all the hallmarks of electioneering, and is designed to put pressure on the Cameron administration.'

Sources