Prospect of public beneficial ownership register recedes

FUTURE prospects of a public register of beneficial ownership being established in Guernsey appear to have taken a step backwards with a European Court ruling in favour of client privacy.

MPs Andrew Mitchell and Dame Margaret Hodge, pictured with Deputy Gavin St Pier (centre) in 2018 when he was chief minister, have called for Crown Dependencies to create public registers of beneficial ownership. (Picture By Peter Franklan, 31537482)
MPs Andrew Mitchell and Dame Margaret Hodge, pictured with Deputy Gavin St Pier (centre) in 2018 when he was chief minister, have called for Crown Dependencies to create public registers of beneficial ownership. (Picture By Peter Franklan, 31537482)

The Court of Justice of the European Union was asked to rule following complaints from individuals and companies who appealed to the Luxembourg registry for their names to be kept private.

The public registers in Luxembourg and the Netherlands have already been taken down.

The ruling came as a surprise. The States said: ‘We are examining the judgment.’

Guernsey Association of Trustees chairwoman Rhona Humphreys said that Guernsey and the UK needed to pause and take stock of the ruling.

‘It is important that we stay in step with the law and with our competitor jurisdictions who have made parallel commitments,’ she said.

‘The States have been consulting with us and we have been happy with the action proposed so far.’

A public register was established in the UK in 2016 but has been criticised as being effectively voluntary and not being policed.

The European Union enacted them in 2018 as part of anti-money laundering rules as part of a crackdown on the use of so-called shell companies for terrorism and financial crime.

Campaigners for transparency have criticised the ruling, saying it sets the fight against corrupt money back by years.

Guernsey has long fought the introduction of compulsory public registers.

In 2016, the Crown Dependencies and British Overseas Territories signed a bilateral agreement with the UK, which committed the island to providing UK law enforcement agencies with information about the beneficial owners of companies incorporated in the island.

The island has a centralised but private register, kept offline at the Guernsey Registry, with access available to law enforcement on request.

Since then there have been regular calls, especially from a number of British MPs, led by Labour’s Dame Margaret Hodge and Conservative Andrew Mitchell, for the register to become public.

In 2019 the Crown Dependencies jointly announced an action plan to move towards a public register – or, as they jointly outlined, ‘developing international standards of accessibility and transparency’ – which included a commitment to public registers when they become an international norm.

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