Island well placed to meet international requirements
Richard Field, a partner at Appleby Guernsey, offers an analysis of what a public register could mean for the island – and some of the potential challenges...
Guernsey has long been at the forefront in terms of transparency of ownership and committed to meeting global standards in this area. In response to the fifth anti-money laundering directive, there is movement towards implementing registers of ownership across the EU, accessible by law enforcement, fiscal authorities and ‘obliged entities’ (such as banks and other financial institutions).
Guernsey already has a verified system in place, which is available to foreign law enforcement and fiscal authorities. It has also offered to assist other jurisdictions to implement similar regimes.
Not only does the island have a number of agreements for the mutual exchange of information with foreign authorities, but the island’s businesses are subject to strict requirements around onboarding clients and structures. Importantly, the information is verified, which acts as a strong deterrent to those seeking to use the financial system for ulterior purposes.
Guernsey’s position has long been that it would meet international standards around registers of ownership and in this regard, the island is well placed.
The latest update is therefore an evolution of the current position from the island’s perspective. Extending access to EU platforms and obliged entities will no doubt assist in terms of streamlining onboarding of clients and structures.
The thorny issue of public access to the registers is more complicated, as it brings with it the risk of misuse of that information by criminals and/or nation states with authoritarian regimes.
The EU plans to implement public access sometime after 2022, following an implementation review. Guernsey’s position is consistent with its long-held stance that it would adopt similar measures as and when they become an internationally recognised standard. To that end, we await developments around the implementation review.
It is important to remember the distinction between transparency and publicly-available information. Despite the hype, there is a dearth of evidence to justify placing information of this nature into the public domain. It is hoped that the implementation review will take proper account of privacy concerns that have been raised over some years and that appropriate safeguards will be built into the system.
Guernsey’s commitment has been mirrored in Jersey and the Isle of Man, whose governments issued a joint statement.
