States welcome UK decision on privacy debate

Wednesday 02 May 2018

Guernsey's government is breathing a sigh of relief after the UK's Labour Party has withdrawn an amendment which could have affected the Channel Island's domestic policies.

Deputy Gavin St Pier said he welcomed the news that the UK's House of Commons had "quite rightly chosen to respect our centuries-old constitutional relationship with the Crown" adding that the Labour Party had "withdrawn its attempt to impose domestic policy on the Islands when presented with a better understanding of the constitutional position."

The States of Guernsey had been working closely with colleagues from Jersey and the Isle of Man to ensure the UK Parliament was aware of the island's constitutional position in respect for the Sanctions and Anti-Money Laundering Bill which was debated in the House of Commons today.

The purpose of the Bill was to enable sanctions to be imposed and to prevent money laundering and terrorist financing, including after Brexit. The Bill had faced a number of amendments on its passage through Parliament, in both houses, in relation the Overseas Territories and Crown Dependencies seeking to legislate without consent to implement public registers of beneficial ownership. To date all of those attempts have been defeated.

At the end of yesterday, the proposal was binned at the last minute as part of a “significant concession” by the cross-party team of MPs – including Labour grandee Dame Margaret Hodge and 21 rebel Conservatives – proposing it.

They said that they would respect the autonomy of the Crown Dependencies - focussing instead on the Offshore Territories - but re-affirmed that the islands remained firmly in their sights. 

“Parliament will expect Her Majesty’s Government to make the point persuasively that we hope that the Crown dependencies will embrace the same ethical position and equal transparency, and accept that what is sauce for the goose is also sauce for the gander,” Andrew Mitchell MP said.

And here is the moment my and Andrew Mitchell's amendment officially became part of the Bill! #SanctionsBill #SAMLBill #TackleTaxHavens pic.twitter.com/dzSOSYaW43

— Margaret Hodge (@margarethodge) 1 May 2018

In total two amendments were considered: one on the Overseas Territories which was laid by Dame Hodge was passed. It had wide cross party support and seeks to implement public registers in those jurisdictions by 2020. A similar amendment was laid by the Labour Party in respect of the Crown Dependencies. While this did not have the same cross party support as the Overseas Territories amendment, it was the focus of the States of Guernsey's engagement with the UK Government and parliamentarians in London over the past few days. This amendment was not laid and that decision has been welcomed by the island's Chief Minister.

"I welcome the news that the House of Commons has quite rightly chosen to respect our centuries-old constitutional relationship with the Crown," said Deputy St Pier.

"The Labour Party has withdrawn its attempt to impose domestic policy on the Islands when presented with a better understanding of the constitutional position.  We have worked in tandem with Jersey and the Isle of Man given our common constitutional histories.  I would like to thank the strong support afforded to us by the UK Government, in particular the Ministry of Justice and the support from our friends in the All Party Parliamentary Group.  This demonstrates the value of regular and active engagement across Westminster and Whitehall."

The P&R President explained that had this amendment been passed it would not have had any domestic effect in Guernsey and would have created a constitutional breach for the U.K: "The fact that the House of Commons has chosen to differentiate between the Crown Dependencies and the Overseas Territories, carrying the amendment from Dame Margaret Hodge in respect of those territories, highlights these important constitutional differences. These differences give Guernsey greater constitutional resilience from any attempts to undermine our autonomy but we will review what further steps need to be taken to ensure that Parliament does not inadvertently create a constitutional dilemma in the future."

He said work will always continue to protect the islands' relationship with the UK and other jurisdictions: "In the meantime, we always take any attempts to undermine our relationship with the UK with the utmost seriousness and will defend the ancient rights of islanders. We will also continue to engage with parliamentarians to ensure this relationship is well understood."

Jersey Chief Minister Senator Ian Gorst, who travelled to London with Deputy St Pier at the last minute, said he was “pleased that the UK Parliament has chosen not to seek to impose its will on Jersey, in direct contradiction to constitutional convention”, adding that the decision “recognises the constitutional autonomy of the Island, and preserves the established historical relationship between Jersey and the United Kingdom.”

Guernsey already has "robust systems" in place to tackle tax evasion, money laundering and other financial crime, which the States said "meet the highest international standards – including a leading position on the retention and sharing of beneficial ownership information".

The adoption of a public register was a policy choice for the UK, not an "international obligation" and Guernsey had already chosen to build on its own existing good practice by establishing a central register of beneficial ownership of legal persons in the summer of 2017.

Following todays historic vote the UK must also address secrecy in the Crown Dependencies and support the Overseas Territories to alternative development paths – which prioritise the well-being of their most marginalised citizens https://t.co/aHxGKz4Ti6 #tackletaxhavens

— Tax Justice Network (@TaxJusticeNet) 1 May 2018

In a statement, the States said the information held on Guernsey’s register is "up to date and accurate". It said Guernsey agreed and signed an exchange of notes with the UK Government on sharing information about beneficial ownerships with law enforcement agencies with Deputy St Pier adding: 

"Also today, the UK Parliament, in a Written Ministerial Statement, correctly recognised the effectiveness of the beneficial ownership register that we established in 2017 and the arrangements to share this information with UK law enforcement authorities.  

"Guernsey is committed to meeting international standards, in particular in relation to fighting financial crime. As we have previously stated we would introduce a public register if that becomes the agreed global standard. This must be a level playing field for all. We are also committed to engaging with the Labour Party - or indeed any other interested parties - so we can work with them to ensure that we can consider whether and how their concerns and policy objectives can be addressed within the constitutional settlement between Guernsey and the Crown."

Pictured above and top: Deputy Gavin St Pier