Cameron urges OTs again to adopt public registries

British Prime Minister David Cameron has once again called on the U.K. Crown Dependencies and Overseas Territories to implement beneficial ownership registries. In an open letter released on April 25 he said the Treasury would welcome an early opportunity to discuss the considerations of the Crown Dependencies and Overseas Territories.  

“As you know, I believe that beneficial ownership and public access to a central register is key to improving the transparency of company ownership and vital to meeting the urgent challenges of illicit finance and tax evasion,” Mr. Cameron wrote. 

Following the recently concluded public consultation process in the U.K., Mr. Cameron said he will introduce legislation in the U.K. Parliament as soon as possible. 

“I am very keen that we should move forward together in raising standards of transparency globally. I therefore wholeheartedly welcome all those Overseas Territories who are joining us in leading this work, either by already having a central registry in place or by consulting on establishing one. I particularly welcome those that are already considering making their central registry publicly accessible,” Mr. Cameron wrote. 

In the letter, he argued that making company beneficial ownership information open to the public “is by far the best approach” as it will give businesses and individuals a clearer picture of who ultimately owns and controls the companies they are dealing with and make it easier for banks, lawyers and others to conduct due diligence on their customers. 

Moreover, it would help reduce the cost of investigations for tax and law enforcement, particularly in developing countries. 

Richard Hay, counsel to the IFC Forum, an organization of offshore law and financial services firms, disagrees that a public registry is the best option. In a statement, he predicted that a public register of beneficial ownership would hurt U.K. business because U.S. and Asian financial markets were unlikely to implement similar measures. 

Mr. Hay said, “In practice corporate service providers afford the only (although not infallible) route to the real owner,” citing the findings of an academic study titled “Global Shell Games.”  

The U.K.’s Crown Dependencies and Overseas Territories have collected high quality beneficial ownership information through reliance on this model for over a decade, he noted. 

“Without including the systematic data verification already conducted in the British offshore centers, U.K. shareholder information will be poor quality. Exporting this inferior and untested U.K. model to the British offshore centers would degrade their current compliance with FATF standards on data collection,” Mr. Hay added. 

Mr. Cameron’s letter said that given the complexity of the reforms, the U.K. would continue to refine the technical and operational aspects of the registry over coming months as the legislation is taken through parliament.  

In an action plan released recently, the Cayman Islands government committed to conducting an assessment of whether a central registry of beneficial ownership and control of companies is the most appropriate and effective way to improve transparency by 2015.  

The Ministry of Financial Services issued a public consultation paper concerning the introduction of public registry of beneficial ownership information on Nov. 25, 2013, which invited the financial services industry to respond by a subsequently amended deadline at the end of February 2014. 

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Mr. Cameron
AFP
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