Le Hérissier: ‘Expect more pressure from UK on transparency’
UK proposals to impose a transparent company register upon Jersey that were blocked at the eleventh hour have only been ‘delayed’, a local constitutional expert has warned.
Earlier this month MPs dropped a bill amendment calling for the Crown Dependencies – Jersey, Guernsey and the Isle of Man – to produce a public register of beneficial ownership of companies, which would reveal who ultimately owns assets held by companies registered in each jurisdiction.
It is feared that the move would have harmed the finance industry in each island, with rich clients valuing strict confidentiality arrangements, particularly in the private wealth sector that is important to Jersey.
Another amendment to the Sanctions and Anti-Money Laundering Bill to impose a similar transparent register on the British Overseas Territories, such as Bermuda, Cayman and the British Virgin Islands was passed by the House of Commons
The move led to a public outcry from those jurisdictions who claim that the UK is violating their constitution by effectively legislating for them.
Roy Le Hérissier, a former States Member and expert on Jersey’s constitution, said that he believed that the Crown Dependencies ultimately avoided a similar fate due to their superior lobbying capabilities in London.
But he added that he also thought that the international climate is moving towards greater transparency for offshore finance and that the UK would put pressure on Jersey to comply with this in the coming years.
‘The [constitutional] convention is that the UK parliament will not interfere with the internal affairs of the Island, which is probably why we were successful and because we had better lobbying than elsewhere,’ he said.
‘But in purely practical terms this is only a delay. The UK can apply pressure on us to do what they want. And, if they say to the British Overseas Territories that we are going to legislate for you, then those territories are going to turn around and say to the UK “why are you allowing Jersey, Guernsey and the Isle of Man to steal our business?”. There will be pressure from that group of jurisdictions.’
Mr Le Hérissier said it ‘had never been taken to the wire’ in terms of Westminster trying to force legislation upon the Island, but that the UK applied pressure when it wanted to pass new laws or regulations.
‘What the UK will do is have informal meetings with senior people from the Island and say this is the way that we want things,’ he said.
‘They would say that this is the way that things are going internationally and those [jurisdictions] which we are responsible for are going to have to be subject to this as well.’