Relations between the UK and its Overseas Territories have taken “a significant backwards step” following a move to compel the OTs to make their company ownership registries public by the end of 2020.

That was the reaction of David Burt, the Premier, after hearing the outcome of a debate in the UK’s House of Commons.

If Bermuda and the other thirteen UK Overseas Territories do not make their company ownership registers public they face having the requirement imposed by Britain.

A debate in the House of Commons, in London, saw the UK government accept an amendment to the Sanctions and Anti-Money Laundering Bill. The Bill had previously passed through the House before being turned back by the House of Lords in January.

Mr Burt was asked for his response, and in a statement said: “The action taken in the UK Parliament today signals a significant backwards step in the relations between the United Kingdom and the Overseas Territories.

“In the case of Bermuda, it is ironic that in the very year we celebrate the 50th Anniversary of our Constitution, Bermuda is confronted with this regrettable ‘about face’ which fails to acknowledge this long history of full internal self-government.

“The Government of Bermuda has a strong constitutional position and the people of Bermuda can rest assured that we will take the necessary steps to ensure our Constitution is respected.”

The key new clause in the Bill, which was accepted by the UK government, states that: “For the purposes of the detection, investigation or prevention of money laundering, the Secretary of State must provide all reasonable assistance to the governments of the British Overseas Territories to enable each of those governments to establish a publicly accessible register of the beneficial ownership of companies registered in each government’s jurisdiction.

“The Secretary of State must, 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.”

An Order in Council is effectively a decree from the UK and must be approved by both Houses of Parliament.

Mr Burt said: “This attempt to legislate for Bermuda from London is a return to base colonialism and is an action that has no place in 2018. It is especially telling that the Crown Dependencies are not included in this amendment which is restricted to the Caribbean OTs and Bermuda.”

Bermuda has had a central beneficial ownership registry for about 70 years, and under tax transparency agreements it is obliged to share such information with authorities in the UK and many other countries.

However, it has been argued that making the Bermuda registry public, when few other countries do, would damage the island’s international business sector.

During yesterday’s debate UK Foreign Office minister Alan Duncan acknowledged “the will of the House” and said the government would not vote against the new clause.

He said the UK government was “acutely conscious of the sensitivities in the overseas territories and of the response that the new clause may provoke”.

Sir Alan said: “I give the overseas territories the fullest possible assurance that we will work very closely with them in shaping and implementing the Order in Council that the Bill may require. To that end, we will offer the fullest possible legal and logistical support that they might ask of us. Alongside that, we retain our fullest respect for the overseas territories and their constitutional rights, and we will work with them to protect their interests.”

Margaret Hodge, an opposition Labour Party MP, was one of the two principal backers of the amendment.

The UK introduced a company ownership public register in 2016, however Dame Margaret accepted that the UK’s registers need to be improved.

She said: “That is not an either/or; it is a both/and. We need both to improve our registers and ensure transparency in our overseas territories.

“To those who argue that the money will transfer to other tax havens, I say this: there may well be some leakage, but our tax havens play a disproportionately large role in the secret world that makes tax havens”.

Some MPs argued that the UK should not legislate on the issue for its overseas territories. Dame Margaret said: “I agree that it would be far, far better for all of us if those overseas territories willingly enacted public registers, but we have now had five years, and it is clear that they will not act without real pressure from us. Our new clause gives them a further three years — until the end of 2020 — to adjust to a transparent regime.

“The present practice is unsustainable. The fifth anti-money laundering directive from the EU will bring in public registers across the EU by the end of 2019.”

Countries across the world, from Nigeria and Afghanistan, are beginning to commit to public registers, she said, adding: “We should be showing leadership on this, not trying to be the last man, or the last woman, standing against what is morally right.”

Sir Alan said the UK was the first G20 country to establish a public register of company beneficial ownership, and that it is committed to seeing the overseas territories and Crown Dependencies take further action.

He noted that significant progress has been made through “consensual joint action”, and that four of the seven overseas territories with significant financial centres have central registers or similar arrangements that are able to provide UK law enforcement authorities with access to information at short notice.

With the new clause attracting wide support among MPs from different parties, including 19 on the government’s side who signed the amendment, Sir Alan said: “We do not want to legislate directly for the overseas territories, nor do we want to risk damaging our longstanding constitutional arrangements, which respect their autonomy.

“However, we have listened to the strength of feeling in the House on this issue and accept that it is the majority view of this House that the overseas territories should have public registers ahead of their becoming the international standard, as set by the Financial Action Task Force.

“We will accordingly respect the will of the House and not vote against the new clause.”

The clause does not apply to beneficial ownership of trusts.

A separate clause would have seen the Crown Dependencies — the Channel Islands and Isle of Man — treated in a likewise manner. Helen Goodman, an opposition Labour MP, brought that amendment. However, she did not press it to a vote, explaining that the clause was linked to the EU’s fifth anti-money laundering directive and added: “I think we can reach an agreement on how to proceed on these matters.”