On 1 May, the UK parliament voted to accept an amendment to the sanctions and anti-money laundering bill on Tuesday that requires the UK’s overseas territories to publish public registers of company ownership by the end of 2020. The territories include Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat and the Turks and Caicos Islands.
Beneficial ownership disclosure is a key element of improve governance and tackling tax avoidance and corruption. Since 2013, it has been a requirement of the EITI Standard. Through this, the EITI has developed deep experience of the challenges of beneficial ownership transparency. EITI reporting has shown that it is not always easy for a legal entity in say, DR Congo, to identify the beneficial owners of its corporate or legal owner in say, the British Virgin Islands (BVI). With this announcement that the UK overseas territories will have public registers, beneficial ownership reporting in EITI countries will become much easier. Through this landmark legislation, another missing piece of the puzzle slotted into place. Information about who owns in tax havens will make it harder to facilitate tax avoidance in resource rich EITI member countries.
From 2013, the EITI Standard has recommended that its 51 countries “maintain a publicly available register of the beneficial owners of the corporate entity(ies) that apply for, or hold a participating interest in an exploration or production oil, gas or mining license or contract”, including “the level of ownership and details about how ownership or control is exerted”. It also requires disclosure of policy, laws and practices regarding beneficial ownership transparency. In 2016 it was agreed that by 2020, implementing countries are required to request, and companies disclose, beneficial ownership information. This includes identification of any politically exposed persons. For more information on the EITI beneficial ownership transparency work visit eiti.org/beneficial-ownership.
In June 2016, the UK became the second country (after Ukraine) to establish a beneficial ownership register – their Persons of Significant Control (PSC) register.
In December 2017, the EU reached agreement on amendments to the 4th AMLD Anti-Money Laundering Directive which requires public access to beneficial ownership registers on companies, interconnecting national registers to facilitate cooperation between Member States, and extending the information available to national authorities.