Leaders of Jersey, Guernsey and the Isle of Man will on Monday warn of a major constitutional clash with the UK if Westminster backs a plan for increased financial transparency on the crown dependencies and an end to secret company ownership.
The chief ministers of the three islands will travel to London to try to head off a cross-party legislative move by MPs to force them to introduce by 2020 public registers about the real owners of companies based there.
Jersey, Guernsey and the Isle of Man claimed that such legislation would be “inoperable”, adding that they already had “robust” arrangements for sharing information about the beneficial owners of companies with tax authorities and law enforcement agencies.
But a group of MPs, led by former Tory minister Andrew Mitchell and Labour backbencher Margaret Hodge, will push a parliamentary amendment on Monday to require public registers containing details of anyone owning more than 25 per cent of a company based in one of the crown dependencies.
The MPs say the move is necessary as part of efforts to tackle money laundering and tax evasion, and the amendment could succeed because it has the backing of at least 20 Conservative MPs.
The amendment is being fiercely resisted by the leaders of Jersey, Guernsey and the Isle of Man, who claimed that Westminster cannot impose new rules without their consent.
“We consider the legislation to be wholly unnecessary in the context of our robust approach to the retention and sharing of beneficial ownership information,” said the three crown dependencies.
They argue that individuals are more likely to share information about the real ownership of a company if they know the details are not about to be made public.
They insist that such information is passed to relevant authorities if a request is made and that they are “committed to the highest standards of financial services regulation and transparency”.
Lyndon Trott, Guernsey’s deputy chief minister, said that if Westminster imposed a public register on the island it would “seriously undermine our longstanding and close relationship with the UK and the crown”.
Mr Mitchell and Dame Margaret claimed in a letter to supportive MPs that the crown dependencies acted as “secret tax havens facilitating economic crime, tax avoidance and tax evasion”.
They have tabled their parliamentary amendment to financial services legislation put forward by the government and intended primarily to protect the City of London in the event of a no-deal Brexit.
Letter in response to this article:
Get alerts on Money laundering when a new story is published