Public registers of beneficial ownership in the Overseas Territories and Crown Dependencies

What is beneficial ownership?

Beneficial ownership refers to the person who ultimately owns or controls an asset (for example, a property or a company).

The concept of beneficial ownership exists because the direct legal owner of an asset is not necessarily the person who actually controls and benefits from it. For example, the registered legal owner of a residential property may be a company registered overseas, which is controlled by an individual.

There are both lawful and unlawful reasons for wanting to separate the legal and beneficial owners of something. Nonetheless, registers of beneficial ownership provide transparency and play an important role in the fight against corruption, tax evasion and money laundering.

Registers of beneficial ownership are records of who the beneficial owners of something are. When a regulator or an official registrar collects and collates this information in one place, it creates a central register of beneficial ownership. They might be publicly available, or only accessible by law enforcement and tax authorities.

The UK introduced its own public register in 2016.

For more on beneficial ownership and associated registers, see the Commons Library research briefing, Registers of beneficial ownership, April 2022.

The UK’s relationship with the Crown Dependencies and Overseas Territories

The Crown Dependencies (Guernsey, Jersey and the Isle of Man) and the fourteen UK Overseas Territories (which include Bermuda, Gibraltar and the Turks and Caicos Islands) are not part of the UK and have different relationships with the Crown and UK Parliament.

As set out in the Commons Library research briefing on the Crown Dependencies, there is a constitutional convention that the UK Parliament does not legislate for them without the consent of local governments.

In the case of the Overseas Territories, as set out in the Commons Library research briefing on The Overseas Territories: An introduction and 2012 Government White Paper on the Territories, although parliamentary legislation for the Territories is rare, the UK Parliament is constitutionally supreme and there are no limits on its ability to legislate for them.

The UK Privy Council can legislate for both through orders in council. This is a form of law used to make changes to local laws and constitutions.

The Sanctions and Anti-Money Laundering Act 2018 Draft order in council and 2023 deadline

In 2018, the UK Parliament passed legislation requiring the Government to prepare a draft order in council by 2020 to require the Overseas Territories to introduce publicly accessible registers of the beneficial ownership of companies. Section 51 of the Sanctions and Anti-Money Laundering Act 2018 requires a Secretary of State to:

no later than 31 December 2020, prepare a draft Order in Council requiring the government of any British Overseas Territory that has not introduced a publicly accessible register of the beneficial ownership of companies within its jurisdiction to do so.

The Government published its draft Order in Council in December 2020, alongside a statement on progress on the implementation of beneficial ownership registers in the Territories to 2020.

The Government said it would not make the draft order to enforce these registers on the Territories until the end of 2023. The Government says this deadline is “consistent with both the Act and the Government’s call for all countries to make public registers the global norm by 2023” and that it would allow “sufficient time for such public registers to be initiated”. It said time was needed as not all Territories had the technical ability to introduce them.

In its written statement to coincide with the publication of the draft order in council, the Government said it only expected those Territories with companies registered in their jurisdiction to produce registers, and that Territories’ registers would be “proportionate” to the number of companies registered there.

The requirement for a draft order in council was moved as an amendment by Dame Margaret Hodge MP and Andrew Mitchell MP (then a Government backbencher), which the Government accepted during passage of the Bill.

A further amendment, moved by Helen Goodman MP, to extend the requirement to Crown Dependencies was not moved, with the Government citing the different constitutional relationship between the UK Parliament and the Dependencies.

Most recently, in November 2022 and January 2023, Stephen Kinnock MP moved amendments to the Economic Crime and Corporate Transparency Bill in the Commons to require the Government to make the order in council by 30 June 2023. Both were defeated after divisions.

Section 3.1 of the Commons Library research briefing on Registers of beneficial ownership provides a summary of legislative debates to 2020.

As summarised in section 3.1 of the Commons Library research briefing on Representing the Overseas Territories in the UK Parliament and Government, many Territory Governments criticised the decision of the UK Parliament to legislate in 2018 and said they did not want to move ahead of global standards on public registers (for example, see the statements from the Governments of the British Virgin Islands and Cayman Islands).

In its 2018 report on the Overseas Territories, the Commons Foreign Affairs Committee backed the introduction of registers as necessary for national security:

Those who seek to undermine our security and that of our allies must not be able to use the [Overseas Territories] to launder their funds. We cannot wait until public registers are a global norm and we cannot let considerations of competitiveness prevent us from taking action now.

In 2018, Transparency International (PDF) also accused the Territories of “representi[ing] a weakness in the UK’s approach to tackling the flow of corrupt wealth around the world”.

Current situation Exchange of notes agreement

Since 2017, the three Crown Dependencies and six Overseas Territories with significant financial services sectors (Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar and the Turks and Caicos Islands) have operated an “exchange of notes” arrangement with the UK. Under this arrangement, they provide law enforcement agencies with company beneficial ownership information on request for companies registered in their respective jurisdictions.

A 2019 review of the exchange of notes found 87% of business in these nine jurisdictions were in scope of the scheme, and plans were in place for this to reach 100% by 2020. The Home Office review said UK law enforcement agencies had found the agreement “extremely useful” though said it was “too soon to quantify the full outcome in terms of successful investigations”.

Private and publicly accessible registers

The implementation of public registers of beneficial ownership has been complicated by a ruling of a European Court of Justice (ECJ) ruling (PDF) in November 2022 that publicly accessible registers could violate certain human rights.

Gibraltar is the only Territory or Dependency that has a publicly accessible register.

In response to a request from the Foreign Affairs Committee for an update on the 2023 deadline, in October 2022 the Government said:

The Government does not accept that work towards these publicly accessible registers is delayed. The Government expects these to be in place by the end of 2023 […] The UK took three years to develop its register. For these reasons, bringing the deadline forward to early 2023 would not be achievable.

Significant progress has been made by several of these jurisdictions […] Smaller [Overseas Territories], such as Montserrat and Anguilla, are working with the [Foreign, Commonwealth and Development Office] to update their systems to enable public access.

Section XX of this Commons Library debate briefing provide further information on progress towards the implementation of public registers of beneficial ownership in individual Territories.

Crown Dependencies

The three Crown Dependencies have committed to introducing public registers. Guernsey, Jersey and the Isle of Man have private registers.

However, in response to the 2022 ECJ ruling, in December 2022 the three governments said they would wait for legal advice before taking further steps.

A written parliamentary question (PQ 10, 7 November 2023) on when the UK Government expects the three Dependencies to introduce a publicly accessible register is awaiting a response.

Overseas Territories

All Territory Governments have committed to introduce publicly accessible registers and the UK Government says all those with financial centres “already share confidential information on company beneficial ownership and tax information with UK law enforcement bodies in real time” (see above on the exchange of notes arrangement).

Several Territories have private registers in place, including Bermuda, the British Virgin Islands, Cayman Islands and the Turks and Caicos Islands (PDF).

In November 2023, the UK Government and Territory Governments held their regular Joint Ministerial Council (JMC). No statement on its outcomes has been published but on 27 November 2023 Foreign Office Minister, David Rutley, said the Department would provide Parliament with an update on progress towards the 2023 deadline before recess:

We discussed the timeline for implementation of Publicly Accessible Registers of Beneficial Ownership at the Joint Ministerial Council over 14-15 November in plenary, in the margins and in bilateral meetings. We have made progress with the majority of the inhabited [Overseas Territories]. Some are yet to confirm precise timelines. Intensive discussions continue with these [Overseas Territories], led by Ministers. We will inform Parliament of the outcome of those discussions before recess.

The May 2023 JMC had announced that the UK and the Territories would be establishing a technical group to consider relevant issues:

be establishing a technical working group on beneficial ownership transparency to share expertise on, and consider issues around, the implementation of publicly accessible registers of company beneficial ownership that contain the necessary safeguards to protect the right to privacy.

Issues discussed in the working group include the impact of the ECJ decision.

The Foreign, Commonwealth and Development Office has also been supporting the Territories through working with Open Ownership, an organisation which supports countries to introduce beneficial ownership registers. It provides individualised support to the Territories. It has also purchased a new company register for Anguilla, to allow for public access.

The Department says it is keeping the 2020 draft order in council under review.