The “devil will be in the detail” as government moves to expand access to company ownership information this year while still leaving certain restrictions in place, experts said.
The comments came after the government confirmed last week in the Speech from the Throne that the new beneficial ownership register set to be launched by June won’t be fully public but will be open to people with a “legitimate interest.”
Robert Briant, partner and head of VI corporate practice at Conyers, said he is optimistic about the government’s plan for the way forward, adding that the coming reforms should balance transparency and human rights.
“It is reassuring to hear that access to beneficial owner information will be restricted to those persons with a legitimate interest,” Mr. Briant said. “This restriction is necessary to balance transparency with the protection of human rights, as rightfully concluded by the courts of the European Union.”
But Mr. Briant signalled that a robust debate could be looming on who gets to see information in the register.
“Of course, the devil is in the detail, and we look forward to discussion as to what constitutes a legitimate interest,” he said.
‘Destruction’
VI-based asset recovery lawyer Martin Kenney said the government faces a tricky balancing act.
“If the mission is to hold people to account for fraud and corruption, a controlled system of transparency of [ultimate-beneficial-ownership] data is to be preferred over an unlimited one as advocated by Dame Margaret Hodge, Global Witness and the other transparency campaigners,” Mr. Kenney said, adding, “This is because the latter will lead to the instantaneous destruction of the investigative value of UBO data upon its publication to the world at large.”
The attorney said that the proposed legislation would be closely scrutinised.
“The devil will lie in the details of the BVI Business Companies and Limited Partnerships (Beneficial Ownership) (Amendment) Regulations, which, according to the recent Speech from the Throne, will define who will possess a ‘legitimate interest’ in UBO identification data sufficient to warrant access to it,” he stated.
Throne speech
The throne speech, which was delivered to the House of Assembly by Governor Daniel Pruce, outlined the government’s upcoming legislative agenda and announced that “eligible categories” that meet a “legitimate-interest test” will be able to access the information in the register.
“The regulations will be designed to balance transparency with the protection of individuals’ human and data rights, thereby allowing specific stakeholders with a demonstrable ‘legitimate interest’ to access beneficial ownership information under defined circumstances,” the governor said in the speech.
Mr. Wheatley has long insisted that access to the register must be limited, a stance that has caused friction with the United Kingdom.
A gathering of the leaders of overseas territories and the UK government in London last November, known as the Joint Ministerial Council, failed to agree a clear position on the issue. Mr. Wheatley said after the meeting that Britain had recognised the OTs’ commitment to providing access to beneficial-ownership registers on a “legitimate-interest” basis with the right to protect privacy in line with individual constitutions.
But a joint communique issued by the UK and the OTs after the talks suggested that Britain wants to go further.
And last month, the UK appointed Baroness Margaret Hodge — who has long advocated for a fully public register in the VI and criticised the territory for lack of transparency — as its new “Anti-Corruption Champion.”
Existing register
Though the VI has already established the Beneficial Ownership Secure Search System, which is accessible to law enforcers abroad on request, it also ceded to UK pressure in 2020 and committed to establishing a public ownership register by the end of 2023.
It then began laying the groundwork for the move before a November 2022 ruling by the European Court of Justice threw the plan into question.
After that ruling, which provided greater protection for individuals’ data in Europe, countries including Austria, Luxembourg and the Netherlands quickly began restricting public access to their registers.
Meanwhile, the VI’s plan to implement a public register in 2023 was delayed.
Professor
Peter Clegg, a professor at the University of the West of England who specialises in the relationships between the UK and OTs, said beneficial ownership reforms are an “important step” for the territory.
“The legislation is trying to square a difficult circle between the calls for greater openness and transparency, including from the UK, and reference to the [2022] European Court of Justice judgment that reinforced some level of privacy,” he said.
However, Mr. Clegg warned the VI against attempting to use the European court’s ruling to justify its own actions.
“Some countries put in place more open systems, such as Spain; others more restrictive, such as Ireland,” he said. “So looking to the EU for guidance, or using it as a fig leaf, is no longer straightforward and should not be relied upon.”
Mr. Clegg agreed that the definitions in the legislation would be crucial.
“I think the devil will be in the detail in relation to the ‘eligible categories’ and ‘legitimate interest’ definitions in the BVI regulations,” he said. “They are an important step, but ultimately they might not go far enough.”
