IoM Consults On Beneficial Ownership Info Disclosure
by Jason Gorringe, Lowtax.net, London
03 July, 2014
The Isle of Man has invited industry feedback on the creation of a central register of beneficial owners to improve transparency.
The move follows the Action Plan published in June 2013 at the G8 Summit in Northern Ireland and the release of UK government recommendations earlier this year. The UK proposed that territories should establish a publicly accessible central register of beneficial ownership information.
The Isle of Man's consultation discusses what efforts are needed to improve the retention and disclosure of beneficial ownership information, and discusses what information needs to be retained to achieve this objective.
The Isle of Man has given consideration as to whether the information should be made public, and has said that, while it is keen to follow international standards, making this information public may be ill-advised. The report notes that no comparable public register yet exists anywhere and there are inherent dangers associated with being a first-mover jurisdiction. It noted that some competing territories are not considering following suit.
The consultation document also points out that the UK Law Society maintains that it is a fundamental principle of English law and natural justice (which would also apply in the Isle of Man) that people should be entitled to privacy, unless there is an overriding public interest issue that requires otherwise.
The consultation invites industry input on a number of technical points including: agreeing a strict definition of beneficial ownership; identifying what safeguards are necessary to protect user's data; and, considering what exemptions should exist (for example in the case of vulnerable individuals).
The consultation document includes a total of 18 questions related to the above points as well as about how local firms feel the move would affect their business.
The role of the consultation process is to assess the benefits and potential risks. The consultation acknowledges that there are many legitimate reasons for persons to be opposed to the data being made public. It notes that some law-abiding investors and companies may prefer to operate in jurisdictions which do not make this information public.
The consultation document also highlights the fact that The Companies (Beneficial Ownership) Act, which came into force in December 2013, already requires the appointment by all companies of a local nominated officer whose duty it is to hold information about the beneficial owners of that company, although this information is not available to the public nor centrally-registered.
Allan Bell, the island's Chief Minister, speaking at the time of the Action Plan, said: "Establishing the ultimate beneficial ownership behind all account relationships conducted in the Isle of Man is a legal requirement backed by on-site supervision to ensure compliance. Legislation is in place to ensure that full and accurate details are maintained on the true ownership and control of every company, trust and fund in the Isle of Man, and that this information is freely available to law enforcement agencies and tax collectors. In response to the G8 initiative, we have further agreed to review this existing provision to determine whether a centralized register would improve transparency of the ownership and control of companies in the Isle of Man."
Feedback is invited in response to the consultation until September 26, 2014.
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