LONDON, England (CNS) — As the upper chamber of the British Parliament on Monday passed the amended Sanctions and Anti-Money Laundering Bill with the inclusion of the imposition of public registers on the British Overseas Territories (BOTs), Lord Ahmad of Wimbledon, the BOT minister, said it was not what he had hoped would happen.
He said in the House of Lords that the standards of the BOTs’ financial services on beneficial ownership information surpass international standards and admitted that, by accepting a policy of imposition, the UK government was disenfranchising the local democratically elected governments.
He accepted, too, that the creation of public registers before it becomes a global standard could have a negative impact on the territories’ economies, and pointed in particular to the territories still recovering from last season’s hurricane damage. Ahmad said the Conservative government had wanted to work with the territories to progress issues on beneficial ownership and not to legislate for them without their consent.
He said that imposing public registers on overseas territories before it is international standards now carries with it the risk of a flight of business to less regulated jurisdictions where law enforcement will not have access to the information that it currently does with the systems established in the territories.
Ahmad also criticised comments made in the House of Commons about tax havens, as he supported the territories’ work on transparency and said that they were important financial centres to the world economy. He noted that the territories have been cooperative and warned that the open public register was not a panacea to the problem of global illicit finance.
Nevertheless, despite his feelings and arguments, he said the Commons had made a decision that had to be respected and that the UK would now seek to assist the territories in establishing the public registers.
During the debate many of the peers present for the debate spoke in support of the territories and warned of a catastrophe for financial services in the BOTs with the imposition of registers before they are the common standard. Lord Naseby, who set down an amendment that was withdrawn, pointed to the Cayman Islands specifically when he said Westminster telling them what to legislate was a constitutional problem.
He spoke of Premier Alden McLaughlin’s consultation with lawyers while he was in London last week, and added that in all likelihood the islands have a good legal case.
Lord Neuberger said that the regulatory standards in the territories were much better than the UK and also pointed out the inequity of imposing the register on the BOTs and not the Crown Dependencies. Several Lords agreed that the UK government should not be imposing laws on the territories, especially when they would have such unfair consequences. Several of the lawyers among the lords also suggested offering their legal services to the BOTs to represent them in a judicial review.
Several of the lords agreed the imposition was unjust, but despite their sympathies, the amendment was supported by the upper house without any changes.
Republished with permission of Cayman News Service