PM Cameron writes to OT leaders on Public Registries
The UK Prime Minister has today published an open letter to the Crown Dependencies and Overseas Territories exhorting them to introduce public company registries showing beneficial ownership information. Research recently conducted by Jersey Finance indicates that a public registry will put hundreds of billions of UK FDI at risk.25 April 2014
The public disclosure of private assets in passive investment companies will deter significant amounts of investment into the UK which will instead find its way to the US, Hong Kong, and Singapore where there are no such disclosure requirements of a public nature nor are there likely to be.
The public registry initiative has come from the Aid Agencies who appear to be exerting significant influence over the No 10 agenda.
In Jersey we have a register of beneficial ownership information available to competent authorities through information exchange agreements. The OECD standard for Automatic Information Exchange has now been adopted by 44 countries and it is likely many more will join. This global transparency standard already effectively combats tax evasion, fraud and illicit use of companies. The proposal for public registries is a significant duplication of effort aimed at curing a problem which has already been solved.
Our research indicates that the UK in implementing a Public Registry is diminishing its attractiveness as an FDI destination and layering up costs for its companies which will seriously impact its international competitiveness without any additional benefit. There will be no improvement in crime detection rates, just a significant reduction in FDI and the use of English companies.
The Jersey model combining full regulation of all corporate service providers, obligatory capture of beneficial ownership information, and the criminalising of the handling of the proceeds of crime, including tax evasion, is a much more effective model.