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British Overseas Territories' deadline for public ownership registers slips to 2023

Monday, 14 January, 2019

Britain's Overseas Territories (OT) will not be forced to establish public registries of company beneficial ownership until 2023 at the earliest, rather than the 2020 deadline demanded by UK Members of Parliament (MPs), it has emerged.

In May last year, a cross-party group of campaigning MPs forced an amendment to the UK's Sanctions and Anti-Money Laundering Bill 2018 (now SAMLA), requiring the government to enforce public registers on the 14 OTs by the end of 2020. The Foreign and Commonwealth Office (FCO) decided to accept the amendment, despite its view that legislating directly would damage the OTs' autonomy.

This caused much anger among OTs with significant financial sectors, especially the Cayman Islands and British Virgin Islands, whose governments described the move as colonialist, undemocratic and a breach of previous agreements. At least one has commissioned a legal challenge to the legislation, and most have been canvassing London to reverse the policy, or at least postpone it until public registers of beneficial ownership have become the international standard.

The legislation enacted in May last year requires the government to begin issuing the relevant Orders in Council in December 2020 to any OTs that have not implemented public registers by that date. Last month, Foreign and Commonwealth Minister of State Lord Ahmad told the House of Commons Foreign Affairs Committee that instant compliance was not the expectation, although some of the OTs, notably Gibraltar, are expected to have complied voluntarily by 2020.

'SAMLA [2018] is quite specific on the obligation on the Government to produce an Order in Council on those Territories that don't have a public register by 2020', said Ahmad. But SAMLA does not specify a date when public registers must be operational, he added.

'We have made it clear to all the Overseas Territories that attended the Joint Ministerial Council [in December 2018] that they will then be obligated to produce an operational public register by 2023.' Ahmad is in the process of confirming this timetable to the OTs in writing, effectively giving them a further three years to implement operational public registers.

He said that 2023 was chosen as the new deadline because the former UK Prime Minister, David Cameron, had originally set that the date as the target for ensuring worldwide obligations on adhering to public registers. He added, though, that the obligation for public registers would remain for OTs whether or not they were adopted worldwide: an outcome which he admits is unlikely.

However, as yet there is no sign of the feared flight of assets from OTs, he said. 'We have made it clear – for example, when I was in the BVI and the Caymans – that if there was concern about, or indeed evidence of, a flight of assets to other territories, we should be alerted to it. That has not been the case.'

Sources