Transparency: exchange of information on company beneficial ownership

Transparency: exchange of information on company

Following the ‘Panama Papers’, there have been further significant measures announced as Governments move to ever increasing transparency

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Following the headlines on the back of the leak of the ‘Panama Papers’, there have been further significant measures announced to add to the move to ever increasing transparency. Britain's Crown Dependencies and Overseas Territories have agreed to introduce company beneficial ownership registers and there has been agreement between Europe’s 'big 5 economies' to exchange information on beneficial ownership of companies and trusts. These agreements are further examples of international cooperation to combat tax evasion and wider non-compliance of tax obligations. They provide big steps forward in terms of the volume of information available to the UK Government concerning beneficial ownership of overseas structures and will significantly speed up the process of getting access to that data. There will be pressure on Governments internationally to follow the lead on this.

Britain's Crown Dependencies and Overseas Territories (CDOT) agree to introduce company beneficial ownership registers

The UK Government has been putting pressure on Britain’s CDOTs to follow its lead in implementing publicly accessible registers of beneficial ownership of companies, but this has so far been met with resistance. Over the last two weeks, however, leaders of the CDOTs have issued statements promising rapid cooperation with the UK authorities on access to information concerning the beneficial ownership of companies – although all stopped short of making central registries that would be publicly available.

It seems the terms of the agreements will vary by jurisdiction. Certain jurisdictions already hold central registers of beneficial ownership and have done for some time, but the agreements extend the arrangements for sharing that information with the UK and commit to use technology to speed up the process, with some quoted as saying that they will deliver information within 24 hours, or even within one hour in 'urgent' cases. Agreements are yet to be reached with Guernsey and Anguilla, but they are expected shortly.

Agreement between Europe’s 'big 5 economies' to exchange information on beneficial ownership of companies and trusts

The UK Government, together with Germany, France, Italy and Spain, has announced new 'hammer blow' rules against tax evasion that will see tax and law enforcement agencies from the five countries exchange data on the ultimate beneficial owners of companies and trusts. The 'big 5' have written to their G20 counterparts urging progress towards a fully global exchange of beneficial ownership information in order to remove 'the veil of secrecy under which criminals operate'. The letter suggests that the OECD, alongside the Financial Action Task Force should take a lead role in developing a new single global standard for such exchange and for the interlinking of registers.
Much of the information that will be shared is likely to already be within the scope of the Common Reporting Standard (CRS), but the new agreement between the 'big 5' is expected to allow for real time sharing of information between participating jurisdictions, rather than having to wait for the annual reporting cycles under CRS, which will begin in September 2017.
 

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