Offshore

Cameron's Push For Greater Crown Dependency Transparency Draws Welcome

Tom Burroughes, Group Editor, London, 12 April 2016

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This publication carries latest news about the saga known as the "Panama Papers".

The "Panama Papers" saga continued to drive change in the offshore world as embattled UK prime minister David Cameron, whose family's financial affairs have drawn hostile scrutiny, announced new measures for greater transparency in dealings with Crown Dependencies such as Jersey and Guernsey.

Cameron yesterday told lawmakers in parliament that an agreement had been signed, so that Guernsey and Jersey will give UK enforcement agencies full access about company ownership and control.

Late last week, the Isle of Man, also a British Crown Dependency, announced it was enhancing measures to facilitate disclosure of beneficial ownership (see here).

The issue of beneficial ownership is controversial because of concerns that full disclosure could put some wealthy people who come from countries with weak law enforcement at risk. The matter has become a toxic one for Cameron, whose own administration has pushed for public registers of beneficial owners, and also cracked down on forms of tax avoidance. However potentially unfair, his father's use of a Panama vehicle has led to criticisms of Cameron operating double standards, although it is not claimed that ownership of such vehicles is illegal or evidence of wrongdoing. A challenge has been to strike a balance between legitimate privacy and secrecy. The advent of the Common Reporting Standard regime of information exchange is, for example, seen as the death-knell of Swiss banking secrecy.

Commenting on the agreement, Geoff Cook, chief executive of Jersey Finance, which speaks for the island's financial sector, said: “We are pleased that the UK government beneficial ownership agreement has been signed by Jersey, which is the culmination of months of inter-governmental work, and which re-affirms Jersey’s commitment to sharing beneficial ownership information with the UK’s law enforcement agencies quickly, and underlines Jersey’s commitment to combatting global financial crime.  

“The agreement [with the UK] will mean very little change for Jersey since our regulations are already sufficiently robust. For more than 20 years we have had a central register of beneficial ownership from which we meet requests for information received from tax authorities and law enforcement authorities. The information contained within the register is subject to strict validation by regulated professionals, meaning that the ultimate owners of every company registered in the island is known and monitored. This is an important distinction from other jurisdictions," he added. 

Cook said: “We hope that the central registries introduced by other jurisdictions will be as effective as Jersey’s. We believe that our register remains more robust than the public registry to be introduced in the UK because the data supplied in the UK will be provided directly by the companies while in Jersey the information is provided by intermediaries who are regulated and required to do so or face penalties. 

"It was also welcome that the Prime Minister told the House that the Crown Dependencies were 'well ahead of other similar jurisdictions' and that 'overseas investments are an entirely standard practice…. not to avoid tax',” he added. 

Guernsey
Allister Langlois, assistant chief minister in Guernsey, also welcomed the move.

"The UK’s agenda on this issue has Guernsey’s full, unqualified and active support. Guernsey is committed to putting in place a secure, consolidated and locally-accessed register with a designated point of contact, and putting the provisions in place for timely and reciprocal information exchange between Guernsey and UK law enforcement authorities. We support the UK’s initiative to put in place global standards, and are pleased that we are moving with the UK and other jurisdictions in that direction," he said.

The publisher of this news service has just released IFC World, a global review of financial centres of all kinds. For more details, see here.

 

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