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An influential group of MPs is calling on the UK Government to ensure that a registry of the underlying owners of Jersey trusts and companies is made public early next year.
The House of Commons Foreign Affairs Committee, which scrutinises UK external relations, has recently published a report into the “illicit finance”, in particular the use of British finance centre by individuals and companies with links to Vladimir Putin and the Russian state.
In it, the committee – which is led by Tory MP and potential next Prime Minister Tom Tugendhat – expresses its “profound regret” that registers are not yet up and running.
“Registers of beneficial ownership for companies in the British Crown Dependencies and Overseas Territories (CDOTs) are not yet public, making access unavailable to investigative journalists, services firms conducting due diligence checks, and private companies responsible for sanctions enforcement.”
It adds: “Shell companies in the CDOTs regularly feature in the ‘nesting dolls’ structures of global hidden wealth.
“As the recent freezing action by Jersey demonstrates, the efficacy of our sanctions regime, and those of our allies, are dependent on being able to ascertain the ownership of assets to be frozen or seized.
“They are severely hindered by the failure to establish greater transparency of ownership. We reiterate the profound regret of our predecessor committee at the pace of these developments given the critical impact on national security.”
In 2019, Jersey and the other Crown Dependencies said it would make its own registry of beneficial ownership – which is currently open to the island’s financial services regulator – public to all.
Pictured: Foreign Affairs Committee Chairman Tom Tugendhat MP Credit: Creative Commons.
However, it has subsequently said that it will only do so when an EU consensus has been reached on beneficial ownership disclosure standards, and all countries commit to comply with those standards.
The Foreign Affairs Committee, however, want the UK Government to set a clear deadline.
“Greater public access to information about beneficial ownership would improve private sector compliance with sanctions, pre-empt sanctions evasion and improve transparency about designated individuals,” it says.
“If the Government and Overseas Territories had achieved this by December 2020, as originally expected, these public registers would have been in place before sanctions on Russia were imposed in response to the invasion of Ukraine.
“We recognise and appreciate the progress made by many Overseas Territories and Crown Dependency jurisdictions.
"We recommend that the Foreign, Commonwealth and Development Office ensures that public registers of beneficial ownership in the Overseas Territories and Crown Dependencies are faithfully implemented by early 2023 with full and free access to company data, not limited to single entries.”
The group go on to request: “In its response to this report, we ask the [UK] Government to explain what is causing the delay and what steps it is taking to speed the process.
“In the meantime, we recommend that the Government leverages its access to information through the Exchange of Notes procedure to proactively request information about non-transparent companies and assets, which it could then make available to banks and partner countries to support sanctions against Russia or publish publicly, where appropriate to do so.”
Bilateral ‘Exchange of Notes’ arrangements allow the UK to request information from jurisdictions like Jersey and vice versa.
Jersey has also committed to contribute to a UK register of beneficial ownership of property by overseas entities, which outgoing UK Prime Minister Boris Johnson launched in January.
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