This is interesting. The Guardian has reported that
The Cayman Islands government said it was considering legal action in an attempt to stop the UK making the overseas territory open up its company ownership registers to public scrutiny, a day after MPs agreed they should do so by the end of 2020.
Alden McLaughlin, the premier of the Cayman Islands, said the territory was keeping all options on the table including a legal challenge to the amendment and accused MPs of making a decision that was “reminiscent of the worst injustices of a bygone era of colonial despotism”.
The territory was joined by Bermuda, which questioned whether the newly passed legislation was constitutional. David Burt, the premier of Bermuda, said parliament's action was a retrograde step after 50 years of “constitutionally sanctioned self-government”. He added that the island territory would take necessary steps to ensure its constitution was respected.
I wonder if they have thought this through?
Whose law are they going to use?
Theirs?
Ours?
I strongly suspect ours. But that concedes ours applies. And that they are subject to it. Which pretty much brings the case to a close.
And what are they going to say? That they:
a) Are British territories
b) Have British passports (albeit with some limitations)
c) Are subject to UK foreign policy and defence
d) Are represented by the UK internationally
But:
e) Their internationally impactful financial services industry is not subject to UK control
And
f) The fact that we have to pick up the tab if anything goes wrong does not prevent them doing anything they like without us having the right to interfere?
That last point is worth elaborating. In 2007 the UK National Audit Office reported that:
The UK bears the ultimate risk of potential liabilities from its overseas territories
Nothing has changed since then.
So let's summarise the Cayman and Bermuda approach. What they want is self-government without assuming any of the risk of doing so and what they want to deny the UK is the right to manage the risk.
I think I can see which side the Supreme Court might take on this.
I'd offer for nothing the one-word advice a barrister once gave one of my clients: settle.
If they want two words of advice it would be settle today.
Sabre rattling will not work in the face of the reality of responsibilities.
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I can’t say what legal arguments they will use since I am not a lawyer, but here’s some common sense arguments against the legislation. One, it’s not being enforced equally across the board. By exempting the crown dependencies, the law creates an uneven playing field. There is ample precedent that the argument that the UK can’t legislate for the crown dependencies is demonstrably false, so there is no logical reason why they were exempted.
Also, it is hard to argue that this is a crucial issue that demands intervention by the UK when there are dozens of other jurisdictions (Delaware, Wyoming, Nevada, Panama, the Netherlands, etc.) that offer these same services without public lists of beneficial owners. How can the government argue that this is a needed measure when financial services providers can simply relocate their offices, including to other entities within the UK’s sphere of influence?
Finally, what can the UK do to enforce this measure? A takeover like what happened in the T&C? That was done because the actions of the government had severe consequences on the residents of that territory. In this case, the territories have a fundamental right to protect the livelihoods of their residents. The UK stomping on that right, while at the same time allowing the same behavior to continue in the CDs, is just a bad look.
Ah, the old defence of ‘you can’t nick me guv because everyone else is doing it’
Sorry: it does not stack, and you know it
And not have the Crown Dependencies been let off: they will be made to comply, not least because of EU law – and we have not left yet
I suggest you stop moaning and go and work on a register
There are some who say the required register already exists, and data is shared with tax authorities and law enforcement already and these organisations represent the public interest when government is accountable to electors.
Clearly these people are wrong as you have said the existing registers are private and you are telling Mr Scott to “go and work on a register”.
A public register is very clearly what I meant
Pedantry is deeply unappealing. Has no one ever told you?
A public register would make the data available to criminals and others who have no reason to be interested. What I think will happen is that those with a genuine public interest reason to be able to access the data ( and they would have to comply with data protection requirements ) can apply through an approved agent to view it along with tax authorities and law enforcement.
That way the requirement to make the data publically accessible would be satisfied.
You mean I am a criminal?
I have no agent I can apply through and I sure as heck want this
As do most journalists I know
You mean they’re criminals too?
What law have we broken?
Ah, the old defence of ‘you can’t nick me guv because everyone else is doing it’
In this case the defense seems legit. This isn’t a case of people stealing cars. It’s government sanctioned activities. And the offshore industry providers will simply migrate to new jurisdictions, who will welcome them with open arms. Do you really think the US and other countries will give up the billions they make from their statuses as a tax haven because the UK cracked down on the BVI?
And not have the Crown Dependencies been let off: they will be made to comply, not least because of EU law
The same EU that sanctions the activities of Switzerland, Lichtenstein, Andorra, Cypress and Malta?
Also, let’s say the UK goes through with this and eliminates all the secrecy across all its jurisdictions. What plans are in place to address the economic ramifications of this move in the OTs and CDs? How much of the UK budget is the government going to spend to offset the massive budgetary cuts those entities will have to implement to make up for the revenue they will lose due to this move? How eager do you think the UK public will be to spend hundreds of millions of pounds on them, in addition to the losses it will generate to the domestic financial services sector due to the move to increased transparency. Meanwhile, there will be no net benefit to society, as the industry will simply set up shop in friendlier jurisdictions – Hong Kong, the US, etc.
Do you think that destroying the economies of the OTs is going to convince other countries that making the move toward more transparency is a great idea, especially when the US has been moving in the exact opposite direction for the past decade?
I have been asked for years if I ever thought we’d crack a tax haven
And I said yes
And I was right
And then I was told that the funds would flow to the next haven
And I said, that’s OK, because we’ll crack that one next
And do you know what? I’ll be right on that one too
That’s my rather annoying track record on offshore issues
I have no doubt that if this were put to the public it would support shutting down secrecy jurisdictions.
I have been asked for years if I ever thought we’d crack a tax haven
And I said yes
And I was right
And then I was told that the funds would flow to the next haven
And I said, that’s OK, because we’ll crack that one next
And do you know what? I’ll be right on that one too.
The next one is the US. Good luck with that.
That’s OK
It won’t be Trump forever
even the American public will, one day, wake up to the way their public services are being undermined by these financial spivs.
I thought the people of Bermuda had rejected independence when it was offered some years ago? They clearly want the relationship with Britain but only when it suits.
With regards to the Jersey register – does anybody know if it was accessed by the UK authorities to unravel the BHS complexities and could the former employees have accessed it?
I can’t answer that one. Sorry