The United Kingdom government singled out the Virgin Islands last week as the sole holdout among the inhabited UK overseas territories and Crown dependencies that has not committed to introducing a public register of company ownership by 2023.
“The UK government has led an international campaign to make such registers a global norm by 2023 and is hopeful the only remaining permanently inhabited territory not to make an announcement, the British Virgin Islands, will make a similar commitment soon,” a July 15 UK government press release stated. “The [Foreign and Commonwealth Office] is continuing to work with their government in encouraging them to take this action.”
The press release followed a letter submitted to the UK Parliament by Baroness Liz Sugg, minister for the OTs and sustainable development.
“In line with the Sanctions and Money Laundering Act 2018, the government will pre- pare a draft order in council before the end of 2020 [requiring the public registers by 2023], which will be published,” Ms. Sugg wrote. “We hope that the British Virgin Islands will also commit to publicly accessible registers of company beneficial ownership without delay.”
Ms. Sugg’s statement dashed VI hopes for a reversal from the new UK government led by Prime Minister Boris Johnson.
In a VI forum last month, Richard Hay, counsel at the IFC Forum and partner at Stikeman Elliot, suggested that there had been hope for a possibility of the UK Parliament voting to modify the 2018 legislation, perhaps by lifting the threat of an order in council and instead requiring all the territories to adopt a non-public registry system like the one that is already in place in this territory.
Eight others to comply
The eight territories that recently committed to introducing public registers are Anguilla; Bermuda; the Cayman Islands; the Falkland Islands; Montserrat; the Pitcairn Islands; St. Helena, Ascension Island and Tristan da Cunha; and the Turks and Caicos Islands. Gibraltar had previously agreed to the measures.
Last year, the Crown dependencies and some of the overseas territories, including Cayman, announced that they plan to implement the registers at the same time as the European Union in accordance with the requirements of the EU’s Fifth Anti-Money Laundering Directive.
UK Foreign Secretary Dominic Raab praised the territories last week.
“This is an important step forward by governments from across the overseas territories,” he said. “I welcome the leadership to improve corporate transparency, and the message it sends about the need to tackle illicit finance globally.”
The UK government also noted last week that the VI and other territories have already implemented systems such as the VI’s Beneficial Ownership Secure Search System, which provides UK law enforcement authorities access to information on the ownership of companies in their jurisdictions to help them detect money laundering and financial crime. However, the UK stressed the need for territories to go further.
The VI government, meanwhile, has repeatedly said that it will enact a public register only when they become a global standard.
On Tuesday in the House of Assembly, Premier Andrew Fahie defended the measures already in place here, calling BOSSs “a system that maintains controlled transparency, which is safer and more secure for individuals, and more effective to law enforcement than unlimited transparency [to] ensure that financial crime is mitigated just as well as a public register and certainly better than an unverified register of any kind.”
Mr. Fahie also called the VI system “unique in its use of licensed and regulated corporate service providers to verify ownership criteria and incorporate companies.”
By contrast, he noted, the UK’s own corporate register contains unverified information.
In another statement delivered a day before the UK statement last week, Mr. Fahie also noted that the VI government had written to the UK to reiterate its continued commitment to the exchange of information under the Exchange of Notes on Beneficial Ownership signed in 2016.
“This government recognises that the continued success of our financial services industry requires that we continue to align ourselves with those and other standards as they emerge,” he said.
Binta Jallow, marketing and media relations coordinator for BVI Finance, referred the Beacon to the premier’s statements.