On 1 May 2018, the UK Government accepted an amendment to the Sanctions and Anti-Money Laundering Bill, which now heads back to the House of Lords.
The amendment will require UK overseas territories to introduce public registers listing the beneficial owners of local companies registered in the jurisdiction by the end of 2020. The UK Government will impose a public register in any territory that fails to establish one by 31 December 2020.
Territories impacted by the amendment include Caribbean countries such as Anguilla, the British Virgin Islands, the Cayman Islands, Bermuda and the Turks & Caicos. Notably, Jersey, Guernsey and the Isle of Man, Britain's crown dependencies, are not included.
Historically, many of the UK overseas territories, particularly those in the Caribbean, have attracted wealthy individuals and companies because of their low- or no-tax environments, and high levels of privacy. However, there have been long-standing concerns that a lack of transparency in these territories has facilitated money laundering, tax evasion, terrorist financing and corruption. Clearly, the primary objective of the amendment is to target these financial crimes, particularly in the wake of recent leaks of confidential information emanating from offshore and international financial centres.
The amendment to the Sanctions and Anti-Money Laundering Bill and other measures to increase transparency could damage economies in certain overseas territories, and improve others: we may begin to see high net worth individuals looking to invest elsewhere, and companies redomiciling to new jurisdictions.