Registers of Beneficial Ownership (fight-in-progress?)

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Camron Ambrose McGee
6 years ago
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1 Aggressive Global Conflict-Free New York London Hong Kong Washington DC San Francisco Miami Cayman Islands British Virgin Islands Registers of Beneficial Ownership (fight-in-progress?) Tim Prudhoe, Kobre & Kim LLP

2 Beneficial Ownership Separation of legal and equitable rights (including ownership) ultimate beneficial owner Statutory and consultatory definition boils down to natural person behind a legal entity or the individual who has a controlling interest in a legal entity

3 Pressure on OTs ref: beneficial ownership registry FATF 2012 recommendations (24 and 25) limited to competent authorities see appendix slides June 2013 UK Government announcements: OTs (and others) enter public consultation process 2013 UK presidency of the G8 countries 2014 UK domestic legislation announced (as of 26 March 2015, the Small Business, Enterprise and Employment Act 2015) (2015, Labour sponsored Tax Transparency and International Development Bill, first reading 25 March 2015)

4 STEP success story ref: trusts, Autumn 2014 Caribbean and Latin America Regional Committee Hugh Tomlinson QC, Matrix Chambers, London Article 8, European Convention of Human Rights: (1) Everyone has the right to respect for his private and family life, his home and his correspondence. (2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

5 Continued UK pressure post-legislation (Financial Times 27 March 2015) (Reuters 28 March 2015) (The BVI Beacon 2 April 2015) (The Guardian 15 April 2015)

6 Under a Labour-led UK Government.. We will seek international agreement to make country-bycountry reporting information publicly available, and we will act at home if agreement is not reached. British Overseas Territories and Crown Dependencies will be required to produce publicly available registries of the real owners based there - Labour Party Manifesto 2015 p18

7 Scope to divide and conquer / divergent interests amongst the OTs Variations on significance / impact across OTs Registry in respect companies to save trusts? Capacity to delivery on practicalities (IT and other information security, plus costs) Continued arguments based around the adequacy of existing systems by which to achieve similar results Global agreement and synchronised implementation cf. automatic exchange of information regime following peer review process

8 Questions? Tim Prudhoe Kobre & Kim LLP

9 Appendix 1 FATF recommendation Transparency and beneficial ownership of legal persons Countries should take measures to prevent the misuse of legal persons for money laundering or terrorist financing. Countries should ensure that there is adequate, accurate and timely information on the beneficial ownership and control of legal persons that can be obtained or accessed in a timely fashion by competent authorities. In particular, countries that have legal persons that are able to issue bearer shares or bearer share warrants, or which allow nominee shareholders or nominee directors, should take effective measures to ensure that they are not misused for money laundering or terrorist financing. Countries should consider measures to facilitate access to beneficial ownership and control information by financial institutions and DNFBPs undertaking the requirements set out in Recommendations 10 and 22.

10 FATF recommendation Transparency and beneficial ownership of legal arrangements Countries should take measures to prevent the misuse of legal arrangements for money laundering or terrorist financing. In particular, countries should ensure that there is adequate, accurate and timely information on express trusts, including information on the settlor, trustee and beneficiaries that can be obtained or accessed in a timely fashion by competent authorities. Countries should consider measures to facilitate access to beneficial ownership and control information by financial institutions and DNFBPs undertaking the requirements set out in Recommendations 10 and 22 (emphasis added).

Pursuing Assets of Sovereign Debtors

Global THE GLOBAL LITIGATION BOUTIQUE Aggressive Conflict-Free New York London Hong Kong Seoul Washington DC San Francisco Miami Cayman Islands British Virgin Islands Pursuing Assets of Sovereign Debtors