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Public beneficial ownership registers in CDOT

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During the House of Lords debate on the Sanctions and Anti-Money Laundering Bill on 1 May, the government agreed to a new clause requiring the government to work with the British overseas territories to set up public registers of company beneficial ownership by 31 December 2020, and to legislate directly if any has not complied by that date.

The government had resisted measures that might lead to the UK government legislating directly in the overseas territories, but agreed to ‘respect the will of the House’.

This will mean the overseas territories having public registers ahead of the Financial Action Task Force (FATF) recommendation for public registers to become the international standard by 2023. The government has confirmed its intention work with the G20, FATF and OECD to promote this ‘global standard’ by 2023.

Ministers have also reported on the six-month review of the implementation of the exchange of notes on beneficial ownership with the Crown dependencies and overseas territories (CDOT), which came into effect in July 2017. Written statements set out the UK’s record to date on promoting transparency in the CDOT and make recommendations for improvements.

As of 9 February this year, the CDOT exchange of notes arrangements had been used over 70 times to provide ‘enhanced law enforcement access to beneficial ownership data’. This information has ‘enhanced intelligence leads and investigations on illicit finance’, the statement says. Under the terms of the arrangements, this information is available to UK law enforcement within 24 hours, or one hour if the request for information is notified as ‘urgent’.

The UK has established a public register of company beneficial ownership and has made a commitment to legislate for a register of overseas companies owning UK property to become operational by 2021.

The Criminal Finances Act 2017 also requires the UK to undertake a statutory review of the exchange of notes arrangements before 1 July 2019, covering the period to the end of 2018.