Out-Law News | 17 Jan 2019 | 2:36 pm | 2 min. read
While the 2018 Sanctions and Anti-Money Laundering Act (SAMLA) requires the government to begin issuing orders against BOTs that have not implemented public registers by December 2020, the legislation does not specify the date by which the registers must be operational, foreign and Commonwealth minister Lord Ahmad told the House of Commons Foreign Affairs Committee last month.
Lord Ahmad told the committee that the BOT representatives who attended the last joint ministerial council (JMC) meeting with the UK were given the 2023 deadline date although some, including Gibraltar, were expected to have operational registers earlier. The government is in the process of confirming the 2023 deadline to the BOTs in writing, he said.
"It is our intention – during the joint ministerial council we made it very clear - to work with the territories themselves," he said.
"SAMLA is quite specific on the obligation on the government to produce an Order in Council on those territories that don't have a public register by 2020. We have made it clear to all the Overseas Territories that attended the JMC – I am in the process of confirming this to them in writing - that they will then be obligated to produce an operational public register by 2023. That is the current timetable," he said.
The minister added that the 2023 date had been chosen as the date "set as our priority for ensuring worldwide obligations on adhering to public registers across the globe" during then prime minister David Cameron's focus on corruption and global financial transparency. However, there is not currently any indication that a global standard will be agreed by this date.
Tax adviser Josie Hills of Pinsent Masons, the law firm behind Out-Law.com, said that the shift in operative date was a realistic one, which suggested that the policy was "more than just lip service".
"The rationale behind the extension of the deadline by which the BOTs must have established the registers is logical," she said. "The measure was introduced because it was felt necessary to prevent the BOTs being used as a haven for fraudulent activity. Those who want privacy, whether or not it is for legitimate reasons, will seek out a jurisdiction that provides it, so to truly make any headway towards transparency, measures would need to be implemented globally."
"The deadline has moved from 2021 to 2023 to allow for an aligned deadline for a more comprehensive approach as opposed to unilaterally targeting the BOTs. To expect that the obligations will be adopted worldwide may be an ambitious goal, but the change in timeframe suggests that it is more than just lip service," she said.
The UK government legislated last year to require the BOTs to introduce public registers of beneficial ownership, in response to lobbying from MPs. The change will bring the position in the BOTs in line with that of the UK, which introduced a public register of 'persons with significant control' (PSCs) in 2016.
The measure has proven controversial with the governments of the BOTs, particularly those with significant financial sectors. Lord Ahmad told the committee that although "emotive statements were made" when the legislation was passed, the BOTs were aware of their responsibilities and the government "expect[ed] every Overseas Territory to comply with the law".
There has not yet been any evidence of a "flight of assets to other territories" in response to the coming change in the law, Lord Ahmad said.