Beneficial Ownership Bill Pulled From Commons

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The small silver lining of hope that the Territory received after the UK Parliament’s mandated public register of beneficial ownership deadline was extended to 2023 was threatened to be pulled back this week. If the UK parliamentarians had succeeded the deadline of 2020 would have been imposed, and thus force the BVI and her sister Overseas Territories to comply by next year’s end.

The aggressive move in the United Kingdom’s parliament to see public registers of beneficial ownership enacted in the British Overseas Territories (UKOTs) and the Crown Dependencies (CDs) by 2020 made its unsuccessful return on 4 March. However, this time, the effort mainly targeted the Crown Dependencies in a similar manner as the May 2018 amendment forced the Overseas Territories.

Monday’s amendment was also piloted by Labour MP Margaret Hodge and the Conservative MP Andrew Mitchell in an effort to seemingly pick up where they left off last year after successfully forcing the BVI and her sister Overseas Territories to reveal the owners of companies registered in their respective jurisdictions.

Both Hodge and Mitchell are members of an All-Party Parliamentary Group on Responsible Tax which believes that a public register will stamp out financial crimes and it was explained that both are among some 40 UK Members of Parliament that supported the amendment. With the USA and other superpowers having many tax havens the Hodge-Mitchell move will achieve little or nothing except mass migration to different untouchable tax havens.

In May 2018 the two UK legislators were instrumental in the House of Lords’ passage of the UK Sanctions and Anti Money Laundering Bill; which some experts in the BVI say will have devastating effects on the main pillar of the economy as well as crippling effects on the financial industry of the other Overseas Territories.

Residents of the BVI had taken to the streets in protest to the amendment last year. Many here in the Territory also viewed the passing of the amendment as an unfair measure since the Crown Dependencies were excluded. Therefore, it seems that as a means to remedy or even things the two MPs were ready to subject the Crown Dependencies to the same public register call. Time will tell.

Fortunately, this time the United Kingdom government was on high alert and swiftly acted to remove the Bill from the House’s agenda thereby preventing the passage. However, it was noted that this was just a temporary measure as the Bill must return shortly.

In fact, it was clear that MP Hodge was not going to give up on her effort as she took to twitter after the Bill was pulled to announce that she will not be deterred. “The Government have taken the outrageous step to pull the Bill from today’s business.They knew we commanded a majority. I hope the Government will accept our proposals but if not we will continue to campaign for public registers. It’s the will of Parliament,” the MP said. Time will tell.

Meanwhile MP Mitchell announced in an interview with the BBC that the amendment is necessary:”This amendment is an important continuation of the British G8 agenda on transparency and openness to combat money laundering and tax evasion…In the face of certain defeat the government have pulled the business for today but the business will return and so will this important amendment,” he said. But what about Luxemburg, Hong Kong, St. Petersburg, Delaware? And the recently black-listed US territories?

The Crown Dependencies took a united front in dealing with the matter as the Chief Ministers of Jersey, Guernsey and the Isle of Man went to the United Kingdom to lobby. Further the Territories issued a joint statement that raised strong objections to several amendments that were being proposed to the UK’s Financial Services (Implementation of Legislation) Bill.

In the statement the three Channel Islands Chief Ministers said: “We are not represented in the UK Parliament, and it is a respected constitutional position that the UK does not legislate for the Crown Dependencies on domestic matters without our consent.  The proposed amendments are contrary to the established constitutional relationships that exist between the United Kingdom and each of the Crown Dependencies and, if passed, would produce inoperable legislation…The proposed amendments attempt to impose public registers of beneficial ownership for all Crown Dependencies and Overseas Territories.”

The BBC report stated that Mitchell complained to the Speaker of the House of Commons, about the government’s proposal to extend the public registry deadline from 2020 to 2023. The article quoted Mitchell stating that the extension was a breach of the stipulations of the House: “The government intended “arbitrarily to extend” the 2020 deadline “by no less than three years to the end of 2023 in flagrant breach of what was agreed by this House”.

In objecting to the 2023 extension both Hodge and Mitchell announced that the deadline to 2020 was a kind gesture to the Territories in consideration of the 2017 hurricanes. In fact, MP Hodge was also quoted complaining about the extension as she accused the UK Government of “a blatant, deliberate and arrogant snub of Parliament”.

Political analysts have stated that the decision to pull the Bill might have placed the UK government into a BREXIT quandary since the Financial Services Bill was said to be one of six legislations the government was seeking to pass by 29 March in order to facilitate a ‘No Deal’ BREXIT.

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