The decision by the U.K. parliament to threaten an order in council to force the overseas territories to make their beneficial ownership registries public has caused consternation in Bermuda, the BVI and other territories.
Bermuda’s premier and finance minister David Burt called the vote “a significant backwards step in the relations between the United Kingdom and the Overseas Territories” and “a return to base colonialism” that has no place in 2018.
“It is ironic that in the very year we celebrate the 50th Anniversary of our Constitution, Bermuda is confronted with this regrettable ‘about face’ which fails to acknowledge this long history of full internal self-government,” he said.
He noted the government of Bermuda had a strong constitutional position and would “take the necessary steps to ensure our Constitution is respected.”
It was particularly telling that the Crown dependencies were not included in the amendments to the U.K. Sanctions and Anti-Money Laundering Bill, he said.
“Bermuda sets the standard in this area, and our reputation for sound regulation is well established, internationally recognized and will be vigorously defended.”
British Virgin Islands
BVI Premier Orlando Smith accused the U.K. government of “constitutional overreach” and a “breach of trust” that calls into question the islands’ relationship with the U.K. and the constitutional rights of the people of the BVI.
He described the U.K. policy as “deeply flawed,” given that the BVI already exchanges beneficial ownership information with authorities in Britain.
In the absence of global standards, the imposition of public registers on the BVI could have serious economic consequences, he said.
Over the past few years, the BVI had prepared its financial services sector for changes like this, Mr. Smith said, and encouraged the adoption of new business models.
“Now is also an opportune time for us to embrace new businesses to support not only our recovery and development, but a futuristic economy with modern and innovative ideas and technology,” he added.
Fabian Picardo, the chief minister of Gibraltar, had already raised constitutional issues ahead of Tuesday’s action in a letter to Conservative MP Andrew Mitchell, who brought the amendment threatening the order in council.
Mr. Picardo noted a long-standing convention between the U.K. government and Gibraltar that no orders in council would be used to make laws in Gibraltar.
“Indeed, my government considers that the use of unilateral Orders in Council imposed without the consent of the government of the relevant territory (or any analogous mechanism) to legislate directly for an Overseas Territory would amount to an unacceptable act of modern colonialism, which would in effect overturn democracy in the relevant territory,” he wrote.
“I cannot emphasize enough to you how unacceptable this is, and how contrary to the direction of travel of the constitutional development of Gibraltar such a step would be.
“It would be more than retrograde, and would call into question the very nature of the relationship of consent and mutual respect which exists today between Gibraltar and the United Kingdom, which I am forever committed to.”
The Caribbean Community, CARICOM, meanwhile issued a statement before Tuesday’s debate emphasizing that countries in the region have expended considerable resources to comply with anti-money laundering standards, supported OECD tax transparency initiatives and concluded international agreements on the exchange of beneficial ownership information.
The self-governance and democratic rights of CARICOM members and associate countries should not be disregarded, CARICOM warned.
“In that context, we are deeply concerned about the potential impact on their economies by any impositions that would go against the spirit of democracy and diminish their standard of living.”
CARICOM’s associate members include Anguilla, Bermuda, the British Virgin Islands, Cayman Islands and the Turks and Caicos Islands.