Clash with UK Government on beneficial ownership as fresh commitment stops short of full access

Wednesday 13 December 2023

The Channel Islands remain on a collision course with the UK Government over public access to their registers which show who really owns companies.

They have released a joint commitment which stops short of UK demands on beneficial ownership registers, while signalling the intention to open them up to businesses that need to do due diligence checks next year and potentially to journalists and interest groups sometime beyond the end of 2024.

Guernsey, Jersey and the Isle of Man, as well as the Overseas Territories, had committed to full public access by the end of this year, but adjusted their positions after a European Court ruling at the end of 2022.

The UK has full public access to its register, as do 14 other EU states and Gibraltar, and insists the islands should follow.

There have been calls for it to legislate on the issue, something strongly resisted on constitutional grounds by the Channel Islands.

Pictured: Deputy Peter Ferbrache.

Policy and Resources President Deputy Peter Ferbrache said: “Guernsey is pleased to announce today its next steps for enhanced transparency and accessibility of information on its register of beneficial ownership. 

“The same approach is being taken by the other Crown Dependencies and we are moving together to swift, but realistic, implementation timescales. 

“The islands share the vital global objective of all responsible jurisdictions to combat financial crime in all its forms.”

The three Crown Dependencies of Guernsey, Jersey and the Isle of Man have issued a new joint commitment that replaces the one they made in 2019 to full public access.

Financial services other businesses within the jurisdictions, collectively known as ‘obliged entities’, who are required to conduct customer due diligence will be able to access the registers before the end of 2024 “in a manner that puts in place appropriate safeguards to manage effectively any interference with privacy rights”.

Access to those classed as having a legitimate interest is further away.

The EU is revising the directive that led to public access beneficial ownership registers and that is still subject to debate there.

Pictured: The European Court of Justice. Its ruling led to a revision of commitments to publicly accessible registers of beneficial ownership.

The islands will wait until the EU defines legitimate interest access, which is expected early next year.

Discussions are being based around a definition of those conducting business transactions, civil society, journalists, law enforcement and higher education.

Questions remain about how and if these bodies will be asked to show they have a specific legitimate interest in a company.

“We will present proposals to our own parliaments for agreement on the definition and implementation of legitimate interest by Q4 2024 at the latest and will implement that access in a reasonable timeframe,” the new Crown Dependencies commitment states.

There is no commitment to what that timeframe is.

Pictured: Deputy Peter Ferbrache (centre) and Jersey Chief Minister Kristina Moore (right).

Deputy Kristina Moore, Chief Minister of Jersey, said: “Jersey meets, and helps to shape, international standards for tackling financial crime. 

“Jersey and the other Crown Dependencies are independently considered global leaders in this area. It is important to look to shared global and regional approaches and we have a proven and ongoing good neighbour policy of cooperation with the UK and EU on such matters. 

“Jersey continues to encourage other jurisdictions around the world to raise their own standards, particularly for the obtaining, verifying and provision of appropriate access to ownership information and effective regulation of the financial services sector.”

Alfred Cannan MHK, Chief Minister of Isle of Man, said: “The Isle of Man has a longstanding, and independently verified, track record of meeting international standards. 

“Working with the other Crown Dependencies, the Isle of Man continues to monitor and respond to international developments to ensure that our own systems remain robust, effective and in line with international obligations. 

“The commitment announced today outlines our shared approach on access to information on our registers.”