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Jersey's financial services sector is being thrust back into the international spotlight with the publication of new report on how Russian money is invested overseas.
The report had been written by the Foreign Affairs Committee of the UK's House of Commons, and is entitled: Moscow's Gold: Russian Corruption in the UK.
It calls on the UK Government to set a deadline for the Crown Dependencies to make their registers of who actually owns local companies publicly available by 2020, and says that the government should be able to legislate for the islands in this area, ripping up the current constitutional position.
There are around 20,000 properties owned by Jersey-registered companies in the UK, and changing the rules would reveal the names of the individuals ultimately benefiting from those ownerships.
That's an issue for the Foreign Affairs Committee as they claim that some individuals who purchase UK property through offshore shell companies, do so to disguise their identities and potentially corrupt sources of their funding.
The row has blown up following the poisoning of Sergei Skripal and his daughter Yulia in Salisbury by a Novichok nerve agent, an act which has been blamed on Russia.
In the strongly worded report, the UK MP's say that:
"The Government responded robustly to the attack on Sergei Skripal and his daughter, Yulia, in Salisbury in March 2018. But despite the strong rhetoric, President Putin and his allies have been able to continue “business as usual” by hiding and laundering their corrupt assets in London.
"The Government must show stronger political leadership in ending the flow of dirty money into the UK. This should include allocating sufficient resources and capacity to the relevant law enforcement agencies, and improving mechanisms for information-sharing. The scale of the problem and its implications for the UK’s security also demand a greater response from the Overseas Territories and Crown Dependencies, through which some of this money enters the UK."
Those words will pile more pressure on Jersey, which recently narrowly escaped being included in a new Bill forcing the company ownership registers to be made public - instead, the UK focussed on the Overeas Territories such as the BVI, not the Crown Dependencies such as Jersey.
The Chief Minister @Ian_Gorst has released a statement following the withdrawal of an Amendment to the UK Sanctions and Anti-Money Laundering Bill that attempted to legislate for Jersey.https://t.co/Ke0E5THxQM pic.twitter.com/cNupCoPh5a
— States of Jersey (@StatesofJersey) May 1, 2018
At the time Jersey argued its register was already available to the police, in the right circumstances, with an hour's notice.
But this new report from the Foreign Affairs Commitment calls on the UK Government to force Jersey to open up that register publicly by 2020 - and it says that on this issue, the UK should be able to legislate for the island:
"While the Government should continue to respect the autonomy and constitutional integrity of the Overseas Territories and Crown Dependencies on devolved matters, money laundering is now a matter of national security, and therefore constitutionally under the jurisdiction of the UK.
"The Overseas Territories and Crown Dependencies are important routes through which dirty money enters the UK. This cannot continue. While we recognise the important innovations that Overseas Territories such as the British Virgin Islands have made in making registers of beneficial ownership available to UK law enforcement, the scale of the problem and the implications for the UK’s security now demand a greater response.
"In its response to this report, the Government should set out its plans for assisting the governments of the Overseas Territories to establish publicly accessible beneficial ownership registers before 31 December 2020. We also call on the Government to provide the same level of assistance to the Crown Dependencies, and to encourage them to take steps to meet the same standard of transparency."
A spokesman from Jersey's External Relations team responded:
“Jersey implements and enforces its own rigorous legislation in relation to money laundering and will consider introducing a public register of beneficial ownership if it becomes the agreed global standard.
We routinely exchange beneficial ownership information with the United Kingdom from our verified, independently and objectively assessed register. This takes place within 24 hours, or within one hour if the request is urgent.
"Matters concerning domestic policy around financial regulation and money laundering are matters for the Government of Jersey and have been historically exercised in this way. This position rightly respects our constitutional relationship with the UK.”
The Foreign Affairs Committee report also features Russian Oligarch Oleg Deripaska, who is linked to two companies EN+ and Rusal, both of which, according to the US Treasury, are registered in Jersey.
"En+ Group is an energy firm that, at the time of its initial public offering (IPO) on the London Stock Exchange, was controlled by billionaire and Kremlin associate Oleg Deripaska. En+, in turn, held a controlling stake in Rusal, a major Russian aluminium firm."
Deripaska was placed on a new list of sanctioned individuals by the United States Treasury on 6 April 2018, after stepping down as President of both EN+ and Rusal in February 2018,
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