On 15 July 2020 a written ministerial statement [HLWS361/HCWS369] welcomed the statements from eight overseas territories committing to introduce publicly accessible registers of company beneficial ownership. In a welcome step forward, the British Virgin Islands’ Government have also committed to adopt publicly accessible registers, meaning that all on the United Kingdom’s inhabited territories are committed to adopt such registers. This is a major change, and the unanimous action from all the overseas territories demonstrates their commitment to tackle flows of illicit finance.
As the next step in the process, the Government are publishing a draft Order in Council, which has been prepared in accordance with section 51 of the Sanctions and Anti-Money Laundering Act 2018. The draft order sets out the Government’s expectations of how the territories will adopt publicly accessible registers. The draft order has been published on gov.uk with a short accompanying note.
The draft order sets minimum requirements for what the UK Government deem to be a compliant publicly accessible register of company beneficial ownership in the overseas territories. This includes the form that the register must take and the information that must be made available such that it would be broadly equivalent to that available in accordance with the provisions of part 21 A of the UK Companies Act 2006.
The draft order sets out a minimum definition of beneficial ownership. This encompasses both direct and indirect control over companies and includes, but is not limited to, control through shareholdings, voting rights or the right to appoint or remove a majority of directors. Where a territory attaches a percentage to the type of control the draft order sets out that this cannot be higher than 25%.
The information on an individual must include their name, country of residence, nationality, month and year of birth and the nature of their control over the company.
It is the Government’s view that only those territories with companies registered in their jurisdiction need to produce registers, and that territories’ registers should be a proportionate reflection of the number of companies registered in their jurisdiction.
By introducing publicly accessible registers of beneficial ownership, the overseas territories are showing that they are responsible jurisdictions and a collaborative partner to the UK. This builds on the exchange of notes arrangements which sees the territories with financial centres share invaluable company beneficial ownership information with UK law enforcement agencies at short notice. A statutory review of these arrangements last year found that they are working well and are providing our law enforcement with invaluable information to support ongoing investigations.
In the light of the firm commitments from all of the inhabited overseas territories to adopt publicly accessible registers, the UK Government have decided that it is now not necessary to make the order under section 51, but will keep this under review.
The UK Government are spearheading an international campaign to encourage more countries to commit to publicly accessible registers by 2023. The UK will continue to work with all territories to support their implementation of publicly accessible registers of beneficial ownership by the end of 2023.
I am sure that members of the House will welcome the publication of this draft Order in Council.