Some UK offshore entities’ beneficial ownership registries start date pushed back

Plans to ensure that all of the UK’s Overseas Territories and Crown Dependencies had beneficial ownership registries in place by 1 July 2017 have hit a snag, and as a result, not all of the jurisdictions have the requisite type of register in place, it has emerged.

Among these not-yet-signed-up jurisdictions is the States of Guernsey. According to a States of Guernsey spokesperson, the recent general election, and the subsequent reshuffle of the Privy Council, the body which gives royal assent to island laws, contributed to what is expected to be a delay of less than a month in the establishment of a central register of beneficial ownership in the Bailiwick.

The Guernsey spokesperson added: “The Beneficial Ownership of Legal Persons (Guernsey) Law, 2017 is now expected to receive Royal Assent at a meeting of the Privy Council on 24 July.

“The delay is expected to have little to no impact on the island’s reputation, as the commitment to having an operational register by 30 June was made to the UK and no one else.

“The intention is to enact the legislation as soon as possible but no sooner than 31 July.”

Meantime, as of 1 July, the UK government has launched a formal review into the arrangements that currently exist between the United Kingdom and each of its territories for the sharing of beneficial ownership information, with the aim of publishing a report on the matter in the first half of 2019.

The Overseas Territories and Crown Dependencies  agreed to set up beneficial ownership registers in accordance with UK wishes in April, in the wake of the publication of the so-called Panama Papers, a raft of documents assembled from leaked Panamanian law firm data and released by the US-based International Consortium of Investigative Journalists.

The UK has a publicly-accessible beneficial ownership register, but officials in a number of its overseas territories and Crown Dependencies – Guernsey, Jersey and the Isle of Man – have expressed reluctance at making beneficial ownership registers freely available to the public, citing, as Jersey Finance chief executive Geoff Cook recently put it, the fact that “there is a line of privacy which should not be crossed”.

“Even those most fervently in favour of making information public” – including the ICIJ – “recognise [this]”, Cook added, noting that the ICIJ had refrained from providing ” the really personal information from the leaked [Panama Papers] documents” when it published its Panama Papers database.

In April, Jersey Finance published an open letter to the House of Lords, urging its members to reject proposed amendments to the UK’s Criminal Finances Bill 2017 that would have forced the British Crown Dependencies and Overseas Territories to establish publicly accessible registers of company beneficial ownership by 2019. The bill was passed and has come into force, as the Criminal Finances Act 2017, without adding the requirement for public accessibility to the beneficial ownership registers, although this matter could still be up for discussion as part of the UK government’s review.

[To read Cook’s latest thoughts on the beneficial ownership debate, click here.]

As reported, HM Revenue & Customs  last month announced it was planning a new beneficial ownership register specifically for trusts, as part of a Europe-wide crackdown on money-laundering and tax avoidance.

Those that set up trusts to “generate tax consequences” will henceforth be required to join a beneficial ownership register, according to guidelines published by HMRC, which said the new trusts register would sit alongside the UK’s existing company beneficial ownership register.

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