Public registers of beneficial ownership come in different forms and the subject remains controversial, given the need to defend legitimate financial privacy and the constant pressure to track down money launderers. A UK-based institute's study on the subject has drawn praise from the BVI.
A UK-based think tank focusing on security matters has set out how international financial centres can make beneficial ownership registers work without threatening legitimate privacy. And its efforts have been lauded by the British Virgin Islands, a jurisdiction that at times has expressed its reservations about the idea.
Royal United Services Institute for Defence and Security Studies has urged IFCs to harmonise standards, make state organisations responsible for validating information, and make beneficial ownership information as accessible as possible, with certain safeguards.
BVI Finance, the organisation that speaks for the British Virgin Islands’ financial services industry, yesterday welcomed the institute’s study.
“RUSI’s comprehensive and balanced research is an important addition to the current debate on beneficial ownership. Context is so important in this issue and is often overlooked or incorrectly applied. RUSI has set out clearly the main areas that must be considered when looking at beneficial ownership disclosure,” Elise Donovan, CEO of BVI Finance, said.
“The report is a practical and useable guide that if taken on board, will go some way in helping achieve a unified approach which is key to success. It will also help as we work together towards a common end-goal of combatting all forms of global financial crime and money laundering,” she said.
The report comes at a time when a drive for public registers of beneficial ownership has alarmed some wealth management figures in offshore centres such as the BVI, Cayman Islands, Jersey, Guernsey and the Isle of Man. Public registers are controversial. Defenders say that they are needed to stop money laundering and tax evasion. Opponents worry that without safeguards governing who has access to this data, they put legitimate financial privacy at risk – no small matter at a time when wealthy persons from certain jurisdictions can be threatened.
The BVI has supported the beneficial ownership register idea, but with certain “reservations.”
In a speech to lawmakers in September, Premier and Minister of Finance of the British Virgin Islands, Honourable Andrew A Fahie, said: “Mr Speaker, subject to our reservations below on the format that the publicly accessible registers of beneficial ownership is to take, your Government commits to work in collaboration with HMG towards a publicly accessible register of beneficial ownership for companies, in line with international standards and best practices as they develop globally and, at least, as implemented by EU member states, by 2023, in furtherance of the EU fifth Anti-Money Laundering Directive.”
“I wish to emphasise, as stated above, this undertaking is subject to our reservations which include that the format must be in line with international standards and best practices as they develop globally and, at least, as implemented by EU member states,” he said. (Source: Government of the British Virgin Islands, 22 September).