British Lords vote down public BO register for BOTs

| 19/01/2018 | 29 Comments
Cayman News Service

Baroness Stern

(CNS): The House of Lords has rejected a proposal calling for the Cayman Islands and five other British Overseas Territories to implement a public register of beneficial owners behind offshore companies registered in the jurisdictions. The vote took place during a debate on the proposed Sanctions and Anti-Money Laundering Bill, when a public register requirement was put forward as an amendment by cross-bench peer, Baroness Stern, who said it was for the purposes of “preventing money-laundering”. However, the peers voted down the amendment by 211 to 201.

In addition to Cayman, the jurisdictions that were the focus of the amendment were Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands. According to the Hansard record, Baroness Stern said that Montserrat has already agreed to a public register. She said the aim was “to bring transparency to the financial operations” in the territories with financial centres.

The amendment would have have given the UK government power to demand that the offshore territories provide details of all the owners operating behind companies registered in the regional territories — a step that the Cayman government and other territory leaders have been battling hard to avoid.

It was the fourth time the Lords debated the idea of the overseas territories producing public registers.

“Each time, the case for ending secrecy becomes stronger as more information emerges about how illicitly obtained money is protected from discovery by anonymity,” Baroness Stern said. “It is clear that not all those who set up shell companies in offshore locations are doing so because they have something to hide, but for those who do have something to hide — drug barons, arms traders, tax evaders, government ministers in resource-rich countries stealing money that should go to the good of the people — anonymous shell companies meet their needs very well.”

But Lord Flight, a Conservative member of the Lords argued against the proposal. He said that law enforcement agencies do not support public registers as they don’t help law enforcement and the UK’s dependencies have already shown themselves “extremely efficient in responding to the requests of policing and other agencies”. He also raised the concern that public registers of beneficial ownership can facilitate identity theft.

His fellow Conservative, Lord Naseby, who  is a vice-chairman of the All-Party Parliamentary Group for the Cayman Islands, came to the defence of the jurisdiction and said that forcing the BOTs to have public registers when no other major competitors do so would see business move away. He also warned against legislating for overseas territories that are self-governing.

“To use an Order in Council for financial regulation when the overseas territories have already adopted international standards while the UK has not would expose the UK to legal challenge as potentially irrational,” he added.

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Category: Business, Financial Services

Comments (29)

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  1. Anonymous says:

    This government and past governments should have charge one percent fees on all the monies that were on the books in Cayman over the years. If they had done that we would be in a better financial situation. If we are getting the blame we should have benefited from the game. I agree with the poster who said and many politician of the past felt the same way.

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    • Anonymous says:

      No, the government and the people would not be better off. They would just spend it on more things that lose money. The debt would be arguably much bigger than it is now.

  2. McCarron MCLAUGHLIN says:

    Great news, now that monster the EU will go on the attack. Great victory for privacy.

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  3. Fred the Piemaker says:

    And in the meantime the UK has a public register, but its completely pointless, as you can set up a company online without providing any verifiable evidence of your identity. Opening a bank account in Cayman, let alone a company, has way more anti money laundering protections than the UK employs.

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    • Anonymous says:

      I just set up a UK company and had to provide KYC info. Though that may not have rolled out everywhere at the moment, it is certainly happening.
      You definitely have to provide more paperwork to open a bank account in Cayman, but to a certain extent, that is because there are fewer facilities for banks to ascertain information themselves, such as Credit Reference agencies and electoral registers. There is also, of course, HMRC sitting behind everything, monitoring financial activities for “tax” purposes (don’t forget that Al Capone was only ever convicted of tax evasion – he’s not the only person to have been caught out by spending more than they supposedly earned).
      The UK public register is actually quite useful, as it contains the names and contact addresses of all company officers, as well as other basic information and all companies have to maintain a register of shareholders, available at the registered premises for inspection. That is sufficient information for the authorities to commence an investigation if they need to.

  4. Anonymous says:

    Even if the UK secured every taxable dollar / pound they would STILL find a way to blow it all and end up right back at square one.

    Of course the above will be vehemently denied and criticised because of the messenger, but this is the oft forwarded verdict of woeful UK govt expenditure – by British observers and institutions.

    In any event, we cannot pretend as if “the City” is not currently fine-tuning its plans to convert to an all-out OFC (go figure) come Day 1 post-Brexit … if the suggested re-referendum does not come to fruition, of course.
    (That inevitable U-turn will only add to the era of embarrassment that is the mother country’s current political state.)

    – Who

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    • Eklund says:

      Why do you hate the British so much? Here they are voting down a proposal re an open BO register for Cayman and, completely off-subject, you’re bad-mouthing them again. Sad.

  5. Anonymous says:

    Let the EU shitstorm begin….we should adopt it anyway…transparency is in our best interests

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    • Anonymous says:

      Look, we’ve already agreed to a register, just not a public one. Law enforcement and tax officials will already have access. Everyone else, mainly fact-wary journalists, are just looking for scintillating stories and innuendo to publish and sell newspapers. They have no legitimate right to that data, nor do the professional kidnappers and extortionists around the world.

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      • Shhhhhhhhhh. says:

        Exactly 2.44 pm. I have on several occasion said here that colonialism is by no means dead. It is very much alive and still trying to bully defenseless countries with the “big stick” to chase funds not under their control back to London or wherever. The reality is simply the toothpaste analogy that when you squeeze, the toothpaste simply goes somewhere else, and the so called “offshore banks” simply pop up somewhere else “offshore”where they are welcomed. The money is NOT going to ever be repatriated to countries where there is heavy taxation, and no respect for people’s privacy. On the subject of money laundering and the drug trade, clean up the drug consumption problem and there will not be a lucrative market, but they will forever pull the mule by the tail.No solution in sight!

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    • Anonymous says:

      There are legitimate commercial reasons for privacy. Having a public register could result in the destruction of value in certain acquisition transactions.

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    • Anonymous says:

      Would you like your bank account(s), assets, loans, etc., published?

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      • Anonymous says:

        I’m not avoiding my moral obligation to help others by hiding money in sleazy tax havens.

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        • Anonymous says:

          Immaterial. As the Baroness said “It is clear that not all those who set up shell companies in offshore locations are doing so because they have something to hide, but” we want their information published anyway. So, please begin by posting your bank account(s), assets, loans, etc. There’s a good chap.

    • Anonymous says:

      Told you so!!

    • Shhhhhhhhhh. says:

      Total transparency would scare a lot of them to death. Wonder if the House of Lords acted in self defense? LOL.

  6. West bay Premier says:

    11:07 am and that’s what they want in the UK . All this bureaucratic EU blacklist and the House of Lords are just mordern day piracy .

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  7. Anonymous says:

    …and that should tell you all you need to know, about who is hiding money in Cayman, to avoid paying UK taxes.

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    • Anonymous says:

      I guess the other BOT closer to home are special

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    • Anonymous says:

      I think it was more about the rule of law and the reach the House of Lords should have. They didn’t want to impose direct legislation on autonomously governed jurisdictions as they felt that would be wrong, although 201 Lords felt differently to that!

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      • Anonymous says:

        Well why don’t they and Delaware lead by example and go public themselves? It’s already been proven numerous times that Cayman is a top class jurisdiction in terms of money laundering, due to tough regulation and the inability to move money without proof of identity and source of funds. People tried to launder money through Cayman and failed, couldn’t even set up bank accounts. As for City of London and Delaware however, easy peezy. It seems more to me like smoke and mirrors.

        Put into perspective it’s like telling us all to publish our own identity, bank account details, transactions, withdrawals , deposits, loans, direct debits, salary details and bank transfers for the world to see. Lunacy. Would you be happy for that to happen with your money? I just don’t get how we can be more accommodating than we already have been. We already give international regulatory, police and other authorities access to that information. Why the need to put it out there for the public?

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    • Anonymous says:

      “the overseas territories have already adopted international standards while the UK has not” – sounds like the place to put your money is London.

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    • Anonymous says:

      If the money was created offshore then it should remain offshore. Offshore should benefit but no one offshore saw fit to tax them even 1 percent on profit. Wish we had done that many moons ago. We are blamed and get the bad reputation so we should have gotten some of the profits. I will now wait on all the cussing out comments, don’t really give a rats behind as judge Judy would say. Knock yourselves out.

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