UK government pulls Brexit bill debate over beneficial ownership

The United Kingdom government pulled a parliamentary debate on a piece of financial services legislation on Monday after Jersey, Guernsey and the Isle of Man warned against an amendment to the bill that would force the introduction of public beneficial ownership registries in the Crown dependencies.

In a joint statement last week, the chief ministers of the three dependencies echoed objections raised by the Cayman Islands and other overseas territories over a similar amendment to the U.K. Sanctions and Anti-Money Laundering Bill in 2018.

“We are not represented in the U.K. Parliament, and it is a respected constitutional position that the U.K. does not legislate for the Crown Dependencies on domestic matters without our consent,” the statement noted.

The Crown dependency leaders also said they consider the legislation “to be wholly unnecessary in the context of our robust existing approach to the retention and sharing of beneficial ownership information,” which exceeded the standards and accuracy of the existing U.K. public register of company owners.

The cross-party amendment to the Financial Services Bill is endorsed by 55 members of parliament, including a host of prominent Tory backbenchers. Although it is not supported by the U.K. government, it is deemed likely to pass, if voted on.

The amendment also aims to bring the deadline for the establishment of public registers in the overseas territories back to the original date of 2020.

In April 2018, the House of Commons unanimously approved an amendment to the U.K. Sanctions and Anti-Money Laundering Act directing the U.K. government to issue an Order in Council if the deadline is not met.

This highly contentious move attracted much criticism in the overseas territories, where the attempt by the House of Commons to legislate for the territories in a devolved matter was widely regarded as extreme, and reminiscent of colonial times.

In December of last year, overseas territories representatives negotiated with the Foreign Office an extension of the timeline to 2023, to the dismay of U.K. lawmakers.

Tory MP Andrew Mitchell on Monday said the U.K. government’s intention to arbitrarily extend that date by no less than three years to 2023 was in flagrant breach of what was agreed by Parliament.

Even the 2020 deadline was late and had only been agreed to because of the effect of hurricanes on some of the territories at the time, he said.

Labour MP Margaret Hodge, who together with Mr. Mitchell authored both amendments, said taking the debate of the bill off the order paper was “a blatant, deliberate and arrogant snub of this Parliament.”

The amendment “would not just have extended public registers to Crown dependencies but would have reiterated the point over overseas territories,” she said in the House of Commons.

“We were so angered by the action of the Foreign Office that we wanted to reiterate the decision of Parliament, which was passed unanimously, in the amendment that we were proposing today.

That opportunity to reiterate has been removed as well.”

She urged the speaker of the house to outline what he can do “to ensure that government does what Parliament tells it to do in legislation.”

House Speaker John Bercow said he had no advance notice of what was “a most unusual turn of events.”

“It is a rum business,” he said, “that all of a sudden this business which was scheduled for today has been evacuated from Parliament, it has been airlifted from the premises, it has suffered a mysterious and hitherto unexplained disappearance.”

The move by government was “at, the very least, discourteous to the members of Parliament,” he said, adding that he had certainly intended to select the amendment for debate.

“That proposal was entirely orderly. Whatever others thought of it, outside this place or even outside this country, it would have been entirely proper for this house to debate and vote on it,” Mr. Bercow said.

The Financial Services Bill is seen as vital in the event that the U.K. exits the European Union without a deal.

It is not clear when the bill will be rescheduled for a third reading.

However, Mr. Bercow said he would expect the amendment to be part of that debate.

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