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British IFCs agree to UK authorities' electronic access to beneficial ownership registries

Thursday, 14 April, 2016

Britain's Crown Dependencies and Overseas Territories (CDOT) have agreed to deliver information on company beneficial ownership to the UK authorities electronically within 24 hours, or within one hour in 'urgent' cases.

The agreements have been under negotiation for months. British CDOT leaders have issued statements promising rapid cooperation with the UK authorities on access to this information – although all stopped short of making a central registry of beneficial ownership publicly available as the UK government originally called for.

Below is a timeline of developments:

On 4 April Guernsey's Chief Minister Jonathan le Tocq wrote to UK Prime Minister David Cameron promising 'enhanced timeliness of [UK] access to adequate, accurate and current beneficial ownership information in relation to Guernsey companies [through] a dedicated team to be a point of contact between Guernsey law enforcement authorities and their international counterparts. "Timely" means within 24 hours but we consider the target should be thirty minutes where the requesting authority considers it to be urgent [...] We will have in place in Guernsey a secure, consolidated and locally accessed register with a designated point of contact.' A publicly accessible register was explicitly ruled out on security grounds.

On 8 April, British Virgin Islands (BVI) Premier Orlando Smith announced he would sign an exchange of notes on beneficial ownership with the UK to enhance cooperation between law enforcement authorities. It commits the BVI to 'further developing a timely, safe and secure information exchange process to increase [our] collective effectiveness for the purpose of law enforcement in relation to beneficial ownership'.

Cayman Premier Alden McLaughlin then announced on 11 April a reciprocal agreement 'allowing designated Cayman Islands officials to directly obtain and provide details of beneficial ownership of companies incorporated in Cayman to the UK, as required by law and treaty'. McLaughlin stressed this is not a central registry, as beneficial ownership details will remain with the service providers managing them, but rather information will be accessed via a central technical platform. 'The information will not be public and the UK has after long discussions accepted that', he said, though he added that the agreement would not bring an end to the push for a public register. 'The deal secures the UK's approval of the framework and, at least for now, avoids the public exposure of all of the beneficial owners that have offshore accounts, companies, trusts, funds or other financial vehicles domiciled in Cayman.'

On the same day, Jersey's Chief Minister Ian Gorst issued a statement noting that the jurisdiction has had a central register of beneficial ownership since 1989, available in response to requests from the UK National Crime Agency and other organisations. Gorst has now signed an undertaking to use technology to speed up Jersey's response to requests 'so we can answer non-urgent queries in 24 hours and urgent queries in one hour [...] in response to a need for information without delay where terrorist activities are involved.' The information will be electronically accessed by a Jersey designated point of contact acting on the request of the UK authorities, and subsequently transmitted to the competent UK authorities. Before this can be done, though, Jersey's Financial Services Commission (FSC) will need to set up an electronic link with licensed and regulated trust and company service providers allowing the latter to continually update the register.

On 12 April, in an exchange of letters with the UK government, Isle of Man Chief Minister Allan Bell committed to establishing and maintaining a central electronic register of information that will allow accurate and current information to be provided to law enforcement and tax authorities as quickly as within one hour in urgent cases.

Speaking in the UK parliament on 11 April, British Treasury Minister David Gauke MP revealed that similar arrangements have been formally made with all the CDOT except Anguilla. Guernsey has not been able to make such an agreement yet because its parliament is not sitting. 'We expect both those territories to follow in the coming days and months', said Gauke. 'For the first time, UK tax and law enforcement agencies will see exactly who really owns or controls every company in those territories.'

  • At the time of writing, STEP received a letted from Kosie Louw, Chair of the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes in which he states that 'the public release of taxpayer information is not consistent with the international standards for tax transparency. Indeed, a key aspect of our work has been concerned with ensuring that when such information is held by governmental authorities it is shared only with persons authorised in accordance with the standard and the applicable international agreements that give effect to both EOIR and AEOI.'

Sources