Bermuda, the British Virgin Islands and the Cayman Islands are seeing red over British lawmakers’ decision to force its colonies to make public their registers of beneficial owners of companies.
All three colonies have characterised the move as overreach by the mother country, citing their constitutional development and the fact that they have their own locally elected lawmakers. The colonies also shared a common position that the registers would be published if publication became a global standard – the UK’s policy until its about turn yesterday.
Cayman Islands Premier Alden McLaughlin says his territory’s response could include a legal challenge to an amendment to The Sanctions and Anti-Money Laundering Bill, approved by UK MPs yesterday, which could lead to UK imposed legislation to open up the registers.
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, McLaughlin said in a statement.
Bermuda’s Premier David Burt expressed similar sentiments in his reaction to the development.
The Government of Bermuda has a strong constitutional position and the people of Bermuda can rest assured that we will take the necessary steps to ensure our Constitution is respected. This attempt to legislate for Bermuda from London is a return to base colonialism and is an action that has no place in 2018. It is especially telling that the Crown Dependencies are not included in this amendment which is restricted to the Caribbean OTs and Bermuda.”
Premier Burt did not respond when asked via email to the Communication Department what steps he would take.
UK Foreign Office Minister Alan Duncan announced at the start of the parliamentary debate that the government had dropped its opposition to the measures brought by its backbench and the Labour Party. The climbdown was prompted by the fact that a group of 20 Conservative MPs – previously opposed to the move – had signalled their support.
The UK will change the law in its colonies through an order-in-council if the registers are not published by the end of the decade.
The territories all maintain a central registry and share information with law enforcement authorities upon request. But proponents of an open registry argue that full transparency would allow the media and the public to uncover wrongdoing and financial crimes pointing to the 2015 Panama Papers leaks and last year’s leak of information from Appleby.
The measures do not, however, apply to trusts. And critics point out that dirty money will simply relocate to other jurisdictions unless public registers are a global standard.
BVI’s Premier has warned that his territory, still reeling from last year’s hurricanes, could face severe economic consequences.
Britain opened up its beneficial ownership registry in 2016.
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