IoM unveils new ‘one hour’ beneficial ownership reporting scheme

The Isle of Man government is reacting forcefully to last week’s ‘Panama Papers’ revelations, with a vow to step up its ongoing efforts to maintain and promote financial transparency – which chief minister Allan Bell said will include a new “central electronic register” that should enable it to report the beneficial ownership of island companies “within one hour”.

Bell, the island’s former treasurer, told a BBC Radio 4 journalist on Monday morning that the IoM had been “working alongside the United Kingdom now for the last 18 months or so, to develop  a new approach to our knowledge of the beneficial ownership of the various legal entities we have here”.

Within the last few days, he added, “we have committed to changing our system now to a central electronic register, which will have a more timely access [to beneficial ownership information] than what we have at the moment”.

Asked how quickly the IoM could get the beneficial ownership of a particular Isle of Man company to HMRC, Bell replied: “Our proposal at the moment is to aim for a turnaround of within one hour”.

He said the beneficial ownership information service would only be available to “tax and law enforcement authorities”, not to private individuals or company executives, “in line with what the European Union [is] currently implementing under its fourth Anti Money-Laundering Directive”.

In a prepared statement released before the interview, Bell added that the arrangement for rapid reporting of beneficial ownership information with the UK – no mention of other jurisdictions, for now at least, was mentioned – had been achieved “through ongoing constructive discussion. and is an important demonstration of our long-standing partnership to tackle corruption, tax evasion and other serious criminality”.

The statement added that the arrangement being finalised would “commit to providing Isle of Man and United Kingdom law enforcement agencies with adequate, accurate and current beneficial ownership information on all corporate and legal entities incorporated in their jurisdictions”.

“The Isle of Man is not a place where criminals can find a welcome,” the statement quoted Bell as saying.

In the Radio 4 interview, Bell noted that even though the Isle of Man “has never had been banking secrecy, and…[has] been at the forefront of leading the battle internationally to develop a regulatory structure to improve tax transparency and exchange of information”, it, like all “small jurisdictions”, was certain to feel significant new pressure as a result of the Panama Papers document leak, even though such large jurisdictions as the UK often feature higher than the IoM on so-called “secrecy indexes”.

“On the Tax Justice Network’s financial secrecy index last year, the UK was No. 15, Panama was No. 13, and the Isle of Man was 32,” Bell noted.

As reported,  more than 11.5 million confidential documents were passed by an as-yet-unidentified source to Germany’s Süddeutsche Zeitung Zeitung newspaper, which then shared them with the US-based International Consortium of Investigative Journalists. The ICIJ in turn passed them on to some 107 media organisations, including the BBC’s Panorama TV show and the UK’s Guardian newspaper, in 78 countries around the world.

To listen to Bell’s interview on Radio 4, click here, and fast forward to the near-end of the broadcast, at around 2 hours 47 minutes into it.

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