Unbeneficial: what a mess the British have made of this
On May 9, the London Evening Standard published a Letter to the Editor entitled “The UK is bullying its overseas territories and trust is being lost” by Paul Byles of the Cayman Islands Chamber of Commerce. And most surprisingly it was responded to by the Standard’s city editor, Jim Armitage.
On one hand I find Paul Byles’s letter to the Evening Standard admirable because someone from the Overseas Territories is bringing the fight to London without emotionally seeking to test the courts on constitutional grounds.
But on the other hand, I do find some issues within the debate even less transparent by the British parliamentarians themselves.
For example, let’s expand upon the point made by Mr Byles: the Crown dependencies are not required to make their registries public while the British Overseas Territories must do so by December 31, 2020.
So what will stop the dominant legal, accounting and banking firms from simply moving their assets to the jurisdictions that do not have to comply, but are still under British control? Because most dominant law firms, banks and accounting firms in Bermuda and Cayman have offices in Jersey, Guernsey and the Isle of Man.
Are British parliamentarians just conveniently pushing this vast business sector out of the Overseas Territories and right into the Crown dependencies? And, more acutely put, did Dame Margaret Hodge (Labour) and John Mitchell (Conservative) just tweak the legislation to move the business assets from British offshore jurisdictions and much closer to the British homeland?
Moreover, doesn’t this legislative move give the clear and opportunistic advantage to the Crown dependencies to the detriment of the British Overseas Territories?
Because the striking question that British legislators should answer is, why aren’t we all being legislated to comply together — Overseas and Crown?
When the Sanctions and Anti-Money Laundering Bill was given its third reading in Westminster, I actively listened to Dame Margaret’s speech with interest, but I found it a tad disturbing when she admitted that she does not know how this loss of business will affect the Overseas Territories, but then claims — and I am paraphrasing here — that it may not make that much of a difference.
How does she know one way or the other? Has anyone conducted an economic impact assessment? Did the British parliamentarians consult the Overseas Territories for their input in this regard? And, if the answer is yes, did the Overseas Territories fail to respond? Because how do British parliamentarians know what effects this flight of business from the Overseas Territories is likely to have on our economies?
A day earlier in an article in the Evening Standard entitled “Anti-money laundering move ‘may make the problem worse’,” financial crime journalist Henry Williams wrote that “suspect funds” will simply move farther afoot to places such as the Marshall Islands, Cook Islands and Vanuatu — jurisdictions that are perceived as even less transparent.
But I think that both law-abiding clients and suspect funds transparently see the advantage of the Crown dependencies over the Overseas Territories, and will follow where legislation allows it to remain hidden for now.
So, why can’t all territories — Overseas and Crown — be held to the same standards of regulatory requirements at precisely the same time?
It is duly noted that the political climate has changed since the poisoning of the Skripals in Salisbury, whereby Britain sees even greater threats to national security and that hidden assets could be far more dangerous in these continuing threats, but that does not make Britain any safer if some registries are transparent while others are not, when funds can be moved and/or disappear by a mere few electronic clicks over the internet.
Why Britain is demanding transparency is reasonable. How it is going about getting it — ie, freezing competition in the overseas jurisdictions, thereby giving an unfair advantage to the Crown jurisdictions — is just plain wrong.
It is tantamount to freezing Britain out of the European Union during the transition.
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