There will no longer be a vote today on transparency measures
The government has avoided a vote on whether to force crown dependencies like Jersey to have a public register declaring who owns companies registered there.
According to Labour MP Jonathan Reynolds, the government has pulled the financial services bill which was scheduled to be voted on today.
A cross-party amendment to that bill would have forced Jersey, Guernsey and the Isle of Man to be transparent about who owns the companies registered there.
Now that the bill has been pulled, that amendment will not be voted on.
MPs introduced the amendment to reduce the secrecy on these islands – which can be used to enable money laundering.
The crown dependencies have lobbied against measures to force them to have public ownership registers.
On Twitter, Jonathan Reynolds criticised the decision. He said:
“This has nakedly been pulled to prevent the Govt being defeated. A Govt without a Commons majority is in office but not in power. How long can this go on?”
Oxfam were also angry. Their head of inequality Rebecca Gowland said:
“It should be when not if the crown dependencies are required to lift their veil of secrecy – they are at the heart of a global network of tax avoidance that costs poorer countries and regions $170 billion a year.
“Given the level of cross-party support in Parliament for action to make UK-linked tax havens more transparent the Government should allow MPs a vote on this as a matter of urgency.
“Transparency is needed sooner not later to prevent countries being deprived of revenue that could be used to fight poverty and fund schools and hospitals.”
Other secretive UK-linked jurisdictions are undergoing similar battles over secrecy. Places like the Cayman Islands and the British Virgin Islands are not crown dependencies but ‘overseas territories’.
In May 2018, the UK Government was pressured into accepting an amendment to its Sanctions and Anti-Money Laundering Bill which would require overseas territories to implement a public register of company ownership.
Joe Lo is a freelance journalist and a reporter for Left Foot Forward
Guardian Today: the headlines, the analysis, the debate – sent direct to you (March 5, 2019)
Hodge said the government had taken an “outrageous step” in pulling the bill because “they knew we commanded a majority. I hope the government will accept our proposals, but if not, we will continue to campaign for public registers.”
Anti-corruption campaigners believe public records of share ownership would restrict the use of anonymous offshore companies by terrorists, dictators, corrupt politicians and criminals.
An anonymously owned Isle of Man company was cited as being part of the “Global Laundromat” money-laundering scheme, a way for Kremlin insiders and well-known Russians to shift cash abroad.
Jersey, Guernsey and the Isle of Man, all major offshore financial centres, maintain they are self-governing territories and it is not for the UK parliament to dictate how they are regulated.
Downing Street indicated the bill had been pulled so ministers could study the constitutional implications for the three crown dependencies. It insisted the UK was committed to maintaining global tax transparency standards.
The shadow chancellor, John McDonnell, said pulling the bill was “more evidence that this government is incapable of getting its business through parliament. People have just had enough of the chancellor dragging his feet on tackling tax avoidance.”
Conservative MPs backing the amendment include the former chancellor Ken Clarke, the former Brexit secretary David Davis and the chairwoman of the Treasury select committee, Nicky Morgan.
A joint statement from Jersey, Guernsey and the Isle of Man welcomed the bill’s deferral and said it provided an opportunity for “meaningful engagement” with UK ministers, although it did not commit to public shareholder registers of beneficial ownership.
“We want to move forward in a way that does not breach the rule that the United Kingdom does not legislate for the crown dependencies on domestic matters without our consent,” they said.
“We are committed to exchanging adequate, accurate and current information on beneficial ownership to combat tax evasion, money laundering and corruption.”
Hodge and Mitchell succeeded in getting a similar amendment through the Commons against the government’s will in May 2018, forcing British overseas territories such as the Cayman Islands and the British Virgin Islands to introduce public registers of share ownership by 2020.
The government has sought to delay that to 2023, to give the territories more time to comply, but the amendment reasserts the original deadline of 31 December 2020. It is not clear when the bill will now be timetabled for debate.
Dernières nouvelles – Jersey et le Brexit (19 février 2016) :
S&P has also given a negative outlook to both of the UK Crown dependencies to reflect potential further risks to their economies and external positions should Britain vote to leave the European Union in a referendum to be held either this year or in 2017.
The news was greeted with some dismay in Jersey and Guernsey, which have economies heavily focused on offshore financial services, and in some sectors they compete with Bermuda.
Alan Maclean, Jersey’s treasury and resources minister, said: “While we understand that credit-rating agencies are liable to take a particularly risk-averse view, we are disappointed with this recalibration exercise.
“It is good that Jersey has retained one of the highest possible ratings but we do not accept the rationale behind the change. The European Commissioner for economic and financial affairs, taxation and customs, Pierre Moscovici, recently declared us to be an ‘important partner’ in the fight against tax evasion, fraud and abusive tax avoidance. Our standards of regulation and transparency are justly recognised to be very high.
“The rating does not reflect a decline in our economy or a worsening of our position.”
And regarding the agency’s worries about Britain possibly pulling out of the EU, he said: “Their opinion around the likelihood of Brexit, for example, is not within our control, and there are many speculative views on that issue. I have every confidence that our economy will continue to grow, regardless of the outcome of that referendum.”
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