B0HBYE Rock formation, Virgin Gorda, British Virgin Islands, Lesser Antilles, Caribbean

Leading offshore financial centres have been told to rethink their opposition to David Cameron’s demand that they create a central register revealing companies’ ultimate owners.

The government has told the British Virgin Islands and the Cayman Islands to set out specific timetables for implementing central registers or similar systems by November. It has also written to Bermuda, which already has a central register, asking it to make the information more accessible to law enforcement agencies.

The letters, jointly signed by ministers from the Treasury and the Foreign Office, were sent a day after the UK’s own legislation to improve transparency around corporate ownership gained Royal Assent, introducing a new requirement for companies to keep a register of people with significant control from January 2016.

Richard Hay, a lawyer acting for IFC, a group representing professional services firms in the offshore finance centres, criticised the initiative. He said: “This particular initiative is clearly politically driven given the timing.”

The refusal of the overseas territories to implement registers was a setback for the prime minister, who made transparency a centrepiece of the 2013 G8 summit in Northern Ireland.

The issue is likely to be aired during the election campaign, after Ed Miliband wrote to the offshore centres in February saying they would face sanctions unless they produced a public register revealing the identities of the ultimate owners of companies within six months.

The offshore centres hit back, saying the attack was misinformed and likely to damage UK interests. George Osborne, chancellor, also criticised Labour’s plan, saying it would lead to the British government falling out with the US, France and Germany, which have no commitment to setting up a public register.

Last November, leaders of the G20 nations said that creating central registries of beneficial ownership was just one way of implementing the principle that such information was “adequate, accurate and current” and held onshore.

The BVI held a consultation, which found that four out of five respondents were opposed to a central register because of compliance costs, the impact on its competitiveness and the risk of fraud. But it said it was working on initiatives aimed at achieving the same result, adding that the British government “has been extremely engaging and supportive”.

In January, the Cayman Islands also announced it would not introduce a central register. But its government said it would pass legislation requiring corporate service providers to produce beneficial ownership information to tax, regulatory and law enforcement within a target time of 24 hours.

Mr Hay said the overseas territories regarded the UK’s approach to collecting beneficial ownership information as inferior to their own because it had no provision for systematic verification. Fraudsters were unlikely to self-report the true owners of companies established for criminal purposes, so the UK plan is flawed, he said.

The UK’s register is expected to affect about 2.5m companies and partnerships. In all but a minority of cases — estimated to be about 400,000 — the beneficial owner would be the same as the legal owner, whose name already appears on a public share register. The proposal is not expected to cover companies listed on the stock exchange, which are already subject to strict disclosure requirements

The EU’s fourth money laundering directive will introduce corporate registers that will be publicly available to those with a “legitimate interest”. Advocates of public registries say the ability of the public to scrutinise filings will make it more effective.

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