In a series of questions about the crown dependencies and overseas territories raised in parliament by UK opposition leader Jeremy Corbyn on Wednesday, prime minister David Cameron was asked why he had not taken a stronger line against Jersey for refusing to make its register public.
Cameron said that to do so would have caused some of the crown dependencies to walk away from efforts by the government to share information on beneficial ownership.
“We did not choose the option of forcing them to have a public register because, if that were the case […] some of them might have walked away from this cooperation altogether,” he said.
Flawed idea
But Jersey Finance had an even stronger defence for why publishing an ownership register, as the UK plans to do in June, was a bad idea. It argues that the UK’s plan to make public its register of the beneficial ownership of companies was fatally flawed.
“We believe that the new UK public register will provide data of questionable value, as the criminal fraternity and individuals seeking to misuse UK companies to launder money would be unlikely to comply with the self-reporting requirements,” Jersey Finance said in a paper published on its web site.
“The data will be unreliable as there are unlikely to be any meaningful checks in place (such as those undertaken by regulated Jersey service providers) on the quality of information being captured. In addition, those looking to get around the rules, or those who simply wish not to disclose their information, could simply incorporate non-UK companies which would not be covered.
“Further, an unsophisticated regime without appropriate regulatory supervision (such as the UK is proposing) will result in a gravitation of those seeking to hide their assets and interests to those jurisdictions who will hide behind a veneer of legitimacy but will simply disclose names of ‘proxy beneficial owners’,” it said.
Register effective
Jersey has maintained a central register of beneficial ownership for more than 20 years and is one of only two jurisdictions globally that collect beneficial ownership data for all their companies. This information is available to law enforcement agencies and tax authorities on request.
“I wonder how the UK’s public registry can be considered a better model than Jersey’s central registry, given that UK companies will be required to submit their own information on beneficial ownership, said Geoff Cook, chief executive of Jersey Finance.
“I wonder what checks and balances will be in place to ensure that the information provided is correct.
“Jersey’s model of regulated, professional intermediaries effectively collecting and reporting this information, and the robust supervision of the Jersey Financial Services Commission, provides a more effective way of achieving the ultimate objective of ensuring that our jurisdiction is not used for corruption,” he said.
On Monday the British government announced that all of the crown dependencies and British overseas territories had formally agreed to disclose information relating to the beneficial ownership of companies with two exceptions: Guernsey and Anguilla, although they are expected to do so soon.
