EU moves to end uncertainty over company ownership information

Thursday 29 February 2024

The UK Government wants Jersey and Guernsey to make progress this year on ensuring that civil society and media investigating money laundering and associated crimes will have the ability to scrutinise the real owners of companies and trusts in the Channel Islands.

Both islands stalled and then backed away from previous commitments to allow full public access to registers of beneficial owners – something that currently 14 EU member States, the UK, and Gibraltar have in place.

A court challenge had cast doubt on the legality of public registers, but the EU has now issued a proposed update to its Anti-Money Laundering Directive to combat that.

On 13 December, Guernsey and Jersey, alongside the Isle of Man, said they would wait for the details of that directive update before making decisions on who beyond law enforcement, which currently has access, would be catered for and how.

“On 18 January 2024, the EU published proposals on their Sixth Anti-Money Laundering Directive (6AMLD), which the Crown Dependencies (CDs) stated in their public commitments will help inform the development of their own definitions of legitimate interest access,” said Home Office Minister Thomas Tugendhat in a written response to a question from Andrew Rosindell MP.

Pictured: Home Office Minister Thomas Tugendhat.

“With this important development, and considering the time that has elapsed since their original 2019 commitments, and the importance these improvements will bring to the security of the UK and the wider British family, the Home Office is urging the CDs to make progress as quickly as possible this year.

“The UK Government position remains that the CDs should be working towards publicly accessible registers in the longer term. 

“Nevertheless, the Home Office looks forward to seeing these commitments on legitimate interest access being adopted by the appropriate CD parliaments. Parliament will wish to consider the CDs’ commitments and will closely monitor the situation.”

Transparency International has welcomed the new EU anti-money laundering directive and regulation, but still wants things to go further.

“We commend both the Council and Parliament for ensuring that no EU member state can lock journalists and activists out of beneficial ownership registers,” Maíra Martini, Head of Policy & Advocacy (Interim), Transparency International said when it was announced.

“It is particularly welcome that they will be granted generalised access, without having to demonstrate legitimate interest in every single case.”

A Policy & Resources spokesperson said that the existing beneficial ownership regimes implemented by the Crown Dependencies have been evaluated by international bodies, such as MONEYVAL, the IMF, and the World Bank.  

“The islands have been recognised for their effectiveness in collecting and maintaining accurate and verified information and for exchanging beneficial ownership information with international law enforcement entities and tax authorities. 

“Due to the long-term existence of registers in the Crown Dependencies and the role of Trust and Company Service Providers as gatekeepers who verify information, the Crown Dependencies have a very high standard of accurate information, found in few other regimes worldwide.   

“The islands will continue to enable that effective access to up-to-date and verified information.  We remain committed to the steps laid out in the joint communication on beneficial ownership of 13 December 2023, to introduce obliged entity access in 2024 and then to develop and deliver 'legitimate interest' in line with AMLD6 in a leading timeframe, taking into account international developments."