Isle of Man resists offshore ownership register beneficial ownership
The Isle of Man has refused London’s call to reveal the ownership of thousands of offshore companies, joining other UK Overseas Territories in resisting David Cameron’s transparency push.
The Isle of Man told the Financial Times it is a “red line” issue, joining jurisdictions including Bermuda and the Channel Islands in opposing a public register of company owners. Allan Bell, chief minister of the Isle of Man, said: “We won’t have a public register. We believe our system is working well.”
The UK is publishing its first register of beneficial company ownership this year. It will be searchable and is a response to campaigners who say it will flush out corrupt money. David Cameron, prime minister, has sought to lead the world on the issue.
But Mr Bell told the Financial Times that a public register would simply drive owners to other countries that did not require disclosure, including the US.
“We see no indication the rest of the G20 is taking meaningful steps to follow Mr Cameron’s lead,” he said. “There has to be a global solution or it is meaningless. You are going to penalise legitimate business while criminals and terrorists will simply move money from one jurisdiction to somewhere less well regulated. Because we are a small country there is a belief we will roll over and take steps other countries refuse to.”
There are “legitimate reasons” why people did not want their assets disclosed, he said. They could be hiding them from corrupt regimes, potential blackmailers and kidnappers, or even business rivals.
Since 2000, advisers on the island that incorporate companies have had to keep a record of who owns them. They must reveal it to regulators and the police if asked.
“If you are a Middle Eastern premier salting your money away on the Isle of Man we will quickly find you,” said Mr Bell.
“We are working on a model that will provide the prime minister with the reassurance he is seeking that the Isle of Man is . . . a good partner in providing defences against abuse.”Mr Bell said it was considering a central register, and a “look through” system that would find all companies linked to an individual without having to make numerous requests. It will be testing it with industry soon.
Mr Bell also attacked the UK register, which he said is likely to contain mistakes because the information would not be verified or updated. “If it is going to be meaningful it needs to be current. If the information is not up to date it is not only misleading: it is damaging.”
Mark Denton, chairman of the Association of Corporate Service Providers on the Isle of Man, said people could also dodge it. “They will put up straw men, wives, associates, anybody. So the information will be less reliable than what we have now.”
The island has around 30,000 companies and a population of 88,000.
In December overseas territories agreed to establish central registers, but to keep them private.
The pressure on Mr Cameron is growing ahead of an anti-corruption summit with those countries in May. “The UK will lack credibility in calling for other countries to get better at tackling corruption when its own backyard remains shrouded in secrecy. We need a fully public register,” said Rosie Sharpe, a campaigner at NGO Global Witness.
