Beneficial Ownership Registers: Overseas Territories and Crown Dependencies

David Rutley Excerpts

Thursday 7th December 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)]

It is an honour to serve with you in the Chair, Mr Deputy Speaker. I have not had a chance to say this in person until now, but thank you for your Christmas card. We know that Christmas is coming, and it is always a joy.

I am particularly grateful to the right hon. Member for Barking (Dame Margaret Hodge) for securing the debate. I pay tribute to her for her work as chair of the all-party parliamentary group on anti-corruption and responsible tax, and for her tireless campaigning on this vital issue over many years. She is respected on both sides of the House for the work that she does. This debate has involved some of the most serious and seasoned parliamentarians, respected by me and, indeed, respected throughout the House—four dames, two knights and counting. A heavyweight group of people have made a serious contribution—and I do not say that lightly; the calculation was made by one of my colleagues.

I am also grateful for the presence of the Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), who is probably soon to be right hon. or something, what with all the stuff that is going on. He leads on the Crown dependencies in the Ministry of Justice and takes a keen interest in the issues affecting them and the overseas territories. Another of the dames is also present on the Front Bench: my right hon. Friend the Member for Cannock Chase (Dame Amanda Milling), a very well-respected former overseas territories Minister.

Illicit finance is an active and growing threat to the national security of the UK family. There we have it—it has been said on both sides of the House. I am not sure we need to say much more on that particular point, but it is serious. As set out earlier this year in the UK’s second economic crime plan, illicit finance fuels serious and organised crime, threatens our institutions and enables kleptocrats to establish a financial foothold.

I recognise the important work of my noble friend the Foreign Secretary—just to reassure the right hon. Member for Barking, I can feel the strength of his opinion on my shoulders right now. That also goes for my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), who is the development Minister and Minister for Africa, and my right hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), who is the Security Minister. I think they are well known to the right hon. Lady, and the strength of their opinions is known to her and the House, and to many others too.

This is an important and serious debate. The UK overseas territories and Crown dependencies have a history of working together as partners to strengthen our economic defences against illicit finance. Publicly accessible registers of beneficial ownership are an essential tool in that fight. We want greater transparency, and we are working hard to deliver it. As has been said, the UK implemented our own register in 2016, the first of its kind in the world. The Sanctions and Anti-Money Laundering Act 2018 set out Parliament’s desire for the overseas territories to introduce registers, and in response, all the inhabited territories and Crown dependencies made public commitments to do so.

The UK welcomed those commitments as demonstrations of our joint desire to meet the highest standards in tackling illicit finance. In 2020 we set out in written ministerial statements our expectation that the territories and dependencies would implement registers by the end of this year, and included a draft Order in Council. We then provided technical assistance and support, and we saw OTs make significant progress. For instance, BVI was able to pass appropriate primary legislation in 2022 and the Cayman Islands in 2023, and the CDs have also taken a set of preparatory steps—[Interruption.] Bless you—it could be catching.

It will not have escaped Members’ notice that only Gibraltar currently has an operational register, as was highlighted by my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), the Chair of the Justice Committee. The other thing is that, as those who are following the calendar have noted, there are only three weeks to go until the end of 2023.

Let me be absolutely clear: this is not where the UK Government wanted the OTs and CDs to be. In November last year the Court of Justice of the European Union issued a ruling pertaining to publicly accessible registers, which changed the international context. The judgment found that an EU requirement to implement publicly accessible registers was contrary to the EU charter of fundamental rights. The UK was, however, satisfied with the lawfulness of our own publicly accessible register, and we continue to believe that CDs and OTs could legally implement public registers of their own. Not only that, but no fewer than 14 EU member states allow public access to their beneficial ownership registers even after the November court ruling. That should provide a direction of travel and a sense of security.

We have been in intense discussions with the territories and dependencies since spring—it has been a huge priority for me in recent months, since my appointment as Minister for the overseas territories—to set out the rationale for our view that the registers can indeed be fully implemented in line with the privacy rights that apply to each of them. Montserrat, the Falkland Islands, St Helena, Ascension, Tristan da Cunha and Pitcairn have confirmed that they are continuing to implement theirs, following in the footsteps of Gibraltar, which introduced its own in 2020. However, Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands and the Turks and Caicos Islands, along with the Crown dependencies, continue to have concerns in the light of the court ruling.

Given the differing views on the ruling, we are working together to find ways to make positive progress, including by discussing an interim step that would make significant progress towards commitments to improve corporate transparency: the implementation, next year, of publicly accessible registers of beneficial ownership with a legitimate interest access filter. That would allow access to beneficial ownership information for members of the public with a legitimate interest, such as media and civil society organisations involved in the fight against illicit finance and money laundering. It would also bring the territories and dependencies in line with the EU, as the European court judgment notes that EU member states must continue to enable access to those with legitimate interest.

[Dame Angela Eagle]

rose—

[David Rutley]

I will make one more point and then I will gladly give way.

The right hon. Member for Barking raised an issue regarding requests by Transparency International to HMRC. I cannot comment on individual cases, but if she writes to me, I will follow it up. To be clear, the Government’s policy is that, by definition, legitimate interest should include civil society organisations such as Transparency International.

[Dame Angela Eagle]

The legitimate public interest filter, as the Minister calls it, stands or falls on how “legitimate public interest” is defined. At the moment, it appears to be far too narrowly defined, which undermines the purpose of the transparency. Will he take into account the fact that the filter, as it exists, does not let any light through and is rendering the openness of the list moot?

[David Rutley]

That is not the intention. We want the light to shine on these issues. That will involve media and non-governmental organisations too. I can give the hon. Lady that reassurance.

[Sir Julian Lewis]

rose—

[David Rutley]

I will give way and then I will wind up very quickly.

[Sir Julian Lewis]

Surely, the problem is that if the Minister were correct and any legitimate media could make an inquiry, any citizen with a real interest could go to the media and get the information that way. That must be known in opting for the filter, so presumably its purpose is only to be obstructive and to create legal barriers.

[David Rutley]

The filter is fundamental to the EU’s plans. We want this to be important in and of itself, and also a step on the journey to having full beneficial ownership registers. That remains the case.

I am conscious of time, but I want to assure the House that we are absolutely clear that we want to take this interim step further. We will continue active discussions. The majority of the five territories that we have talked about will sign up to the legitimate interest access filter, and we will continue to have discussions with other jurisdictions that need to do more. As I set out in my response to the right hon. Member for Barking, I intend to update the House with full details before Christmas, and I will lay a written ministerial statement on the outcomes of the ongoing negotiations.

We are continuing further productive discussions with Crown dependencies. In line with the overseas territories, we are recognising our different legal positions following the court judgment, but we are making our expectation clear that the registers need to be implemented during the course of next year. Again, the Home Office will update Parliament before the recess on the outcomes of those serious discussions, as we want to move forward.

In conclusion, I would like to give our great friends in the overseas territories and Crown dependencies the message that we are determined and keen to achieve this important goal for us all. The train is leaving the station. We know the direction of travel. It is time for all our friends in the overseas territories and CDs to get on board. We will do all we can to support them, and it remains a clear priority.