From Caribbean News Now

PROVIDENCIALES, TCI — Following Tuesday’s decision by Britain’s House of Commons to force the Overseas Territories (OTs) to adopt public registers of beneficial ownership of companies, regional governments have responded vigorously to the development, with some calling for a different, more empowering relationship with the UK.

The Sanctions and Anti-Money Laundering Bill now requires the UK’s secretary of state to prepare a draft Order in Council by December 31, 2020, in the event the OTs have not adopted public registers.

The mandatory requirement allowing public access to information about who owns and/or benefits from financial entities is, however, limited to British Overseas Territories, and excludes the Crown Dependencies, such as Jersey, Guernsey and the Isle of Man.

The Turks and Caicos Islands (TCI) government said it had, in an effort to be transparent, spent a considerable amount of time passing new companies legislation that complied with the recent goals set by G7 countries

“But no matter how many goalposts they set for us to attain they have continually changed the goalposts,” said Douglas Parnell, chairman of the ruling Peoples Democratic Movement, pointing out that this new move discriminates against all UK Overseas Territories by threatening to use Orders in Council to force OTs to comply.

“Right now, if there is cause, law enforcement from other jurisdictions can get access. This new move will allow anyone in the world to go online and search any person’s name or company name to see who is associated with it. Every law firm or company management firm that employs a corporate manager/secretary could and most likely would see a loss of their business. It will affect every financial institution in the TCI. But, the Crown dependencies like Jersey, Guernsey and the Isle of Man are exempted.

“Basically, they are robbing the OTs of their financial services business in favour of their own interests. It could go down as the greatest act of white collar transfer of wealth in the history of the world. I believe financial services represent 12 percent of our GDP or economic activity in Turks and Caicos Islands. While we won’t suffer as greatly as the Cayman Islands, Bermuda and the BVI it will impact us.

“More importantly though, this action highlights for us as a people the attitude towards us. If it suits their interests, an Order in Council is easily passed. Our constitution is an Order in Council and could just as easily be changed if there was the political will in the UK. It is time that we seriously consider a different, more empowering relationship with the UK. This should be seen for what it is – a constitutional smack down by our overseers,” Parnell said.

In the British Virgin Islands (BVI), the premier, Dr Orlando Smith, responded swiftly to reassure the financial sector and those who use its services around the world.

“As a constitutional democracy, the BVI believes in the rule of the law. According to the rule of law and our constitution, the fundamental rights of privacy of all citizens and corporate entities will be protected and upheld,” he said.

The BVI has been at the forefront of global transparency initiatives by creating an innovative digital platform, the Beneficial Ownership Secure Search System. The information accessed through the system is verified for accuracy by regulated corporate service providers and available to the British authorities within as little as an hour of a valid request being made.

“The world will continue to need high quality international financial services and the British Virgin Islands will continue to play a leading role in meeting the needs of our clients,” said Lorna Smith, interim executive director of BVI Finance.

Meanwhile, in the Cayman Islands, Premier Alden McLaughlin called the British decision “colonial despotism”, adding that the Cayman Islands Government is considering a legal challenge to the move.

“The actions of the House of Commons in seeking to legislate for the Cayman Islands amount to constitutional overreach and are reminiscent of the worst injustices of a bygone era of colonial despotism,” he said in a statement following the vote on Tuesday.

McLaughlin said his government was “keeping all options on the table, including a legal challenge”, adding that the government was “deeply aggrieved” by the move and that it violated the accepted and conventional constitutional relationships between the UK and the Cayman Islands.

“The Cayman Islands has its own democratically elected government and is not represented in the UK Parliament,” he stated. “Imposition of legislation, through powers that date back to the colonial era, over and above the wishes of the democratically elected legislative bodies of the overseas territories represents a gross affront to the constitutional relationship we currently have with the United Kingdom,” he said.

“Imposing such an obligation on the overseas territories while exempting the Crown Dependencies discriminates unfairly against the Overseas Territories. This amendment is based solely on prejudice and a wilful misunderstanding of our current regulatory framework,” he continued.

He also accused the members of the British parliament of double standards, when during the same debate it voted down an amendment to the UK’s Companies Act, which would have required due diligence on beneficial owners of UK companies in order to prevent money laundering.

IMAGE: Peoples Democratic Movement Chairman, Douglas Parnell

For more on this story go to: https://wp.caribbeannewsnow.com/2018/05/03/overseas-territories-react-to-uk-legislation-requiring-public-disclosure-of-beneficial-ownership/