The government will not permit “uninhibited” access to information about companies registered in the Virgin Islands despite previous promises to implement a public register of beneficial ownership, Premier Dr. Natalio “Sowande” Wheatley said Tuesday.

The position could put Dr. Wheatley’s government on a collision course with London, which has demanded greater financial transparency in order to help combat money crime.

Previously, VI leaders have promised the UK to enact a public register next year, but Dr. Wheatley told the House of Assembly Tuesday that a “legitimate interest test” will be put in place to control who can access it.

“We have until 2025 to put some form of register in place,” he said. “Uninhibited access to the register is unacceptable. Uninhibited access: That’s a no. And therefore we must consider legitimate interest tests for our register.”

Dr. Wheatley stressed that law enforcers will still be able to get hold of the information in the register on request — as is currently the case under the existing Beneficial Ownership Secure Search System, which is closed to the public.

“It is our desire to see that access to that register will be limited based on those that have a legitimate interest, including law enforcement agencies,” he said.

The premier added that the UK has been informed of the government’s stance and that his administration is in “negotiations” with London on the matter.

UK pressure

Under UK pressure, the VI government grudgingly agreed in September 2020 to sign on to a UK plan for the OTs and crown dependencies to implement public registers by the end of 2023.

The VI government subsequently began laying the groundwork for the move, but in November 2022 the European Union Court of Justice issued a ruling that threw the plan into question. In a case involving Luxembourg’s then-public registry, the court ruled that a key provision of the EU’s own anti-money-laundering directive — which required beneficial ownership information to be available to the public — was invalid.

After that, European countries including Luxembourg, Austria and the Netherlands restricted access to their previously public registers.

Labour Party

With polls showing a big win for the Labour Party expected in today’s British general election, the issue could become more complicated for the VI. The party has been much more vocal in criticising the territory’s delays in establishing a public register than the Conservatives, who have held power in the UK since 2010.

Most recently, Veteran Labour politician Dame Margaret Hodge, who stood down at this election but still carries influence, insisted in April that the UK government should “force” the territory to make the company register public.

The push prompted Deputy Premier Lorna Smith, the financial services minister, to say new access arrangements for the register would come into place by mid-2025, despite the original deadline being last December.

Meanwhile, the Labour campaign platform unveiled recently highlights the need to do more to combat money crime across the UK, including the OTs and crown dependencies.

Asia visit

Dr. Wheatley also said Tuesday that a key aspect of Ms. Smith’s 11-day visit to Asia in May had been to reassure companies regarding the government’s stance on the issue. The government insisted this was important as 57 percent of companies registered in the VI are East Asian, with 40 percent being Chinese.

The premier provided the Tuesday update while responding to remarks by opposition member Marlon Penn (R-D8), who said the conversation on the issue had been going on for a long time.

“We are going to have to make some decisions on making companies’ beneficial ownership public in terms of public registers,” Mr. Penn said.

Opposition Leader Ronnie Skelton (R-at large) also called for greater clarity on the matter.

“This open register: Is it open or is it closed?” he asked. “Or is it only accessed by law enforcement?”

‘Marching orders’

His opposition colleague Myron Walwyn (R-D6) said the territory needs to adhere to prevailing arrangements overseas.

“We are getting our marching orders from external forces, and if we want to remain a thriving financial services jurisdiction, the changes that are being required of us by the international organisations must be complied with,” he said.

Law passed

The HOA members were speaking as they prepared to tweak the existing company register by passing the Beneficial Ownership Secure Search System (Amendment) Act 2024.

The bill — which is not part of the plan to broaden public access to the register — seeks to “improve the quality of information required to be reported” under requirements from the Organisation for Economic Cooperation and Development’s Forum on Harmful Tax Practices, according to a summary of the bill’s aims published by the government. Among other steps, the measures would require VI-registered entities to outline their gross income in relation to specific relevant activity.

Law passed

The bill — which was Gazetted March 12 — would also amend the existing law to designate the Governor’s Office as a “competent authority” permitted to obtain information from the BOSS System on request.

“The amendments are needed to address concerns raised by two agencies that utilised the act: namely, the Financial Investigation Agency and the International Tax Authority,” the premier said.

After the debate on Tuesday, legislators unanimously passed the bill with amendments. It now awaits the governor’s assent before taking effect and being made public in the Gazette.