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Anguilla Proposes To Abolish Bearer Shares

by Mike Godfrey, Lowtax.net, Washington
07 September, 2016

Anguilla has launched a consultation on the abolition of bearer share warrants and the conversion of issued bearer shares to ordinary registered shares.

Ownership of bearer shares is not recorded in the company's register, and the anonymity they provide has been criticized as being contrary to international tax transparency standards and anti-money laundering and countering the financing of terrorism rules.

The Global Forum on Transparency and Exchange of Information for Tax Purposes and the Financial Action Task Force have both identified bearer shares as potential vehicles for misuse. In its review of Anguilla, the Global Forum said that "Anguilla did not have sufficiently clear legal and practical mechanisms to provide information related to bearer shares."

As a result, the Anguillian Government is considering prohibiting the issuance of bearer share warrants and requiring holders of existing bearer shares to convert their bearer shares to ordinary shares. The island's Government thinks this approach would "enhance transparency of ownership of Anguillian companies and reduce the potential for illicit activities."

Noting that this approach has been adopted in other jurisdictions, including recently in the Cayman Islands, the Anguillian Government said: "We anticipate there will be some one-off administration costs encountered during the conversion of bearer shares to ordinary registered shares. We would need to ensure there is sufficient time for the conversion process to ensure holders of bearer shares are not unjustly disenfranchised."

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