Senator Ian Gorst: Jersey Respects Privacy, Not Secrecy.

Dame Margaret Hodge, one of the authors of the proposed amendments, maintains that increased transparency in the Bill will function as a tool to fight aggressive tax avoidance, money laundering and other financial crime.

The Government of Jersey, and our colleagues in Guernsey and the Isle of Man, share Dame Margaret’s commitment to the highest standards of financial services regulation and transparency. We are determined that the Crown Dependencies will not be used as centres for processing illicit funds, raised through criminal conduct.

We respect privacy, not secrecy; and our track record in this area is clear.

Jersey has had a central register of beneficial ownership information since 1989; tax evasion was included as a predicate offence in anti-money laundering legislation enacted in 1999; and trust and company service providers have been licensed and regulated since 2000.

In 2017, the Island enhanced its central register by instigating regular updates by trust and company service providers (TCSPs) of the beneficial ownership information held on the Register.

That information is verified by both TCSPs and, independently, by Jersey’s Companies Registry. The veracity and validity of this data is not replicated in the UK’s public register.

I am firmly of the view that law enforcement and relevant authorities, rather than the public, are best placed to examine and interpret beneficial ownership information. And they should have the powers to readily access that data for legitimate investigatory purposes.

In 2016, Jersey and the other Crown Dependencies entered into an Exchange of Notes with the UK to enhance the existing provisions to exchange beneficial ownership data between law enforcement and tax authorities. This agreement allows for information to be provided, as standard, within 24 hours of request or, in urgent matters, within an hour.

This provides law enforcement authorities with adequate, accurate and current information on the beneficial ownership of companies in an extremely short time period. It also enhances law enforcement and protects against issues of security and criminality in both the Crown Dependencies and the UK. 

In April 2018, the signatory Governments carried out a review of the Exchange of Notes Agreement. That review was summarised in a Written Ministerial Statement to Parliament in the United Kingdom and confirmed:

“The Exchange of Notes arrangements have, since their coming into effect in July 2017, provided law enforcement officers with enhanced access to company beneficial ownership information, as originally envisaged in 2016, and are being used to facilitate ongoing criminal investigations”.  

The readiness of the Crown Dependencies to engage in this process demonstrates that we are willing to come to the table to address global concerns around the sharing of beneficial ownership information.

We are supportive of developing standards to increase the effectiveness of registers of beneficial ownership around the world. We remain willing to work with the UK Government and the relevant international bodies to achieve this objective and have reached out in this regard to instigate discussions.

The international consensus – as derived from the Financial Action Task Force (FATF) – requires countries to hold accurate information on beneficial ownership. The standard does not demand public access, or even access to those loosely described as having ‘legitimate interest’.

Our consistent approach has been to work with international standard setters and to deliver compliance as early adopters. Nevertheless, we take note of other developments and regarding this issue, we should also look to EU Member States, their progress with the Fifth Money Laundering Directive (5AML) and in what ways they might expect some sort of compatibility within third countries. The Government of Jersey often notes policy direction on the continent and has, from time to time, referenced this in determining its independent approach to such complex issues.

The Crown Dependencies are proud to be part of the British family. We have a longstanding relationship built on mutual recognition of right of constitutional autonomy.

The Crown Dependencies are not represented within the Houses of Parliament. We have our own elected legislatures who have autonomy on domestic matters. It is a constitutional rule that Parliament does not legislate for the Islands without our consent.Any parliamentarian, lawyer or constitutional scholar will acknowledge that the proper management of beneficial ownership information, which is a domestic matter, must be the legislative responsibility of each Crown Dependency.

I must emphasise that, if the UK parliament seeks to legislate for our jurisdictions directly, in direct conflict with the legislative supremacy of our own Assemblies, the Crown Dependencies will robustly defend our constitutional position using all avenues available to us.

However, we are equally committed to achieving agreement with the UK Government, and the authors of the proposed amendments, on a way of moving forward in a collaborative manner.

I believe we can reach an agreement that does not put our jurisdictions in the position of unnecessary constitutional conflict – one that moves towards the adoption of an international standard on registers of beneficial ownership and furthers the aim of combating global financial crime and tax evasion.

Senator Ian Gorst
Senator Ian Gorst is an elected Member of States of Jersey since 5 December 2005 and is currently the Minister for External Relations. He previously served as the Chief Minister of Jersey for two terms, from 18 November 2011 until 7 June 2018.