I have already said—and I repeat to the noble Baroness—that the OTs are already moving in this direction. I will put it very simply and in context. We have agreed legislation in both Chambers. We have passed it. We have had anti-corruption summits. We have asked OTs to step up to the mark. They are stepping up to the mark. They are taking the action required. Half way through the process, before we have even tested the very objectives that the noble Baroness has just outlined, we say to them, “Sorry, we’re changing the rules”. That to me is unacceptable.
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In Committee I reported that Bermuda, the British Virgin Islands, the Cayman Islands and Gibraltar all have in place central registers of beneficial ownership information or similarly effective systems, and we are taking forward the population of those systems with
beneficial ownership data. Further progress has been made on data population in the interim. For example, the BVI—a territory that, as noble Lords know, was recently devastated by hurricanes Irma and Maria—recently reported that because of the co-operation of the UK Government with the OTs, they expected to have 90% of their data uploaded by the end of last week. Progress has also been made in the other two territories which are working on establishing beneficial ownership systems, but I am sure that even the noble Baroness and other noble Lords who are pressing for this amendment will agree that they have legitimate reasons for being delayed as a result of those devastating hurricanes.
I mentioned in Committee that we are providing support, referred to by the noble Lord, Lord Collins, to the Government of Anguilla to establish its beneficial ownership system. I am pleased to report that work on drafting underpinning legislation is now under way. We also shortly expect to conclude a memorandum of understanding with Anguilla on terms for the provision of our support for the establishment of its electronic search platform. This will enable Anguilla to take forward procurement of that platform.
Another overseas territory, the Turks and Caicos Islands, recently reported that their central register is now in its testing phase. I confirmed in Committee that we have not sought a bilateral arrangement with Montserrat because it had already committed to including beneficial ownership information in its existing public companies register. I am therefore pleased to report that a Bill requiring the inclusion of beneficial ownership information in the existing register was introduced in Montserrat’s legislative Assembly in December. The target date for the addition of beneficial ownership information to Montserrat’s existing register is 1 April 2018.
I have gone into detail and I hope that when noble Lords reflect on this contribution, they will agree that the overseas territories have made significant efforts recently—in some cases in the most challenging of circumstances—to move forward and, yes, to be at the leading edge, working in partnership with the British Government. As I have said previously, the arrangements on beneficial ownership will put them ahead of many G20 countries as well as many individual states of the United States of America. This demonstrates real progress and shows what can be achieved by working co-operatively. I fear that if we pass this amendment, we will risk that relationship and progress with the overseas territories, and indeed they have already indicated their deep concern in this respect. I therefore say to noble Lords that rather than imposing new requirements on the territories without their consent, a point well made by several noble Lords, it is right that we should focus our efforts on what we are doing now: on collaboration for the consolidation of the arrangements and acknowledging the progress they are making.
We are committed to ensuring that these arrangements deliver in practice, are implemented effectively and meet our law enforcement objectives. The Prime Minister made it absolutely clear when she met and spoke directly with the leaders at Downing Street in November last year that the exchanges of notes must be fully implemented. The exchanges of notes provided for the
operation of the arrangements to be reviewed six months after they came into force—that is to say, at the end of last year—and subsequently on an annual basis. We are finalising the terms of reference for the initial six-month review with the overseas territories and, indeed, the Crown dependencies, and we plan to conclude it by March. In addition to these formal review processes, there is ongoing monitoring of the practical application of exchanges of notes by the United Kingdom and each relevant overseas territory. Noble Lords will also recall that the Criminal Finances Act 2017 provides for a statutory review of the effectiveness of these bilateral arrangements. This report will cover the operation of the arrangements up to 31 December 2018. They must be prepared before 1 July 2019, upon which they will be published and laid before Parliament. These reviews will provide the public and Parliament with a clear understanding of how the relevant overseas territories are meeting their commitments. At that point we will be in the right position, as well as in a firm position, to consider what needs to be done.
We want to create a level playing field, but in this regard it is important to touch once again on the UK’s constitutional relationship with the OTs. As noble Lords know, the territories are separate jurisdictions with their own democratically elected Governments and representatives; they are not represented in this Parliament. We would therefore be legislating for them, if we were to move forward on this, without their consent. We have done that, as has been mentioned, only in exceptional circumstances, and rightly so. As I mentioned in Committee, an example of this was to decriminalise homosexuality in certain OTs. We were acting then to ensure that the relevant territories were compliant with their international human rights obligations, but they are already, with the actions they are taking and the progress that has been made, meeting international obligations. While tackling complex criminality and its consequences is, of course, an extremely serious matter, there is a clear constitutional difference in the fact that domestic financial services are an area devolved to the territories’ Governments.
As I said in Committee, legislating for these territories without their consent effectively disenfranchises their elected representatives and legislative bodies, and such a course of action risks harming our overall relationship with overseas territories. The progress we have made will be put back and their electorates and residents will be looking at this, particularly given the damaging precedent that it would set. It also risks leading to a flight of business from the OTs to other, less regulated jurisdictions, where our law enforcement authorities would not have the same level of access to beneficial ownership information as they do under existing arrangements between the UK and the OTs. This could have a serious impact on the economies of territories—some of which are seeking to rebuild once again after the hurricanes—that derive a substantial part of their income from financial services, and it could have adverse consequences for the UK taxpayer. I am sure that that is not the intention of the noble Baroness and other noble Lords in terms of desirable outcomes.
Imposing public registers of company beneficial ownership on the OTs against their wishes and not including their legislative bodies and elected representatives is something that the territories will not take lightly. It will set back progress we have already made and have a negative impact on the ability of UK law enforcement and tax authorities to access beneficial ownership information held across the territories. Parallels with the devolved Administrations and the Sewel convention were also raised in Committee. This was eloquently set out by the noble Earl, Lord Kinnoull, again today. I ask the noble Lord, Lord Collins, and the noble Baroness, Lady Kramer, whether, if instead of talking about Anguilla, Bermuda and Monserrat we were talking about Wales and Scotland, they would be so keen to disenfranchise their elected representatives. That is a question that they must answer.
In conclusion, a key feature of the Government’s approach has been to maintain a level playing field between all OTs with financial centres and Crown dependencies. As I have described, we have robust review processes in place regarding the implementation of these arrangements, both on an ongoing basis with the Crown dependencies and the OTs and through the Criminal Finances Act 2017. If these reviews demonstrate that full implementation of the exchange of notes is not taking place in any individual jurisdiction, then I agree that it would be right for us to consider this issue further, but let us recognise and acknowledge that the OTs are making progress.
The concerns highlighted by the noble Baroness, Lady Stern, whom I respect greatly, and the noble Baroness, Lady Kramer, are of course concerns that we all share, but let us recognise that progress is being made and that the OTs have taken progressive action, and let us give them a chance to report back accordingly. Therefore, while I respect the intent behind the noble Baroness’s amendment, it is not something that I or the Government can accept. On the arguments we have heard today, and perhaps from the exposition and the detailed review I have given of the genuine progress that I know she acknowledges the territories are making, I hope that she is minded to withdraw her amendment.