Isle of Man continues the adoption of international compliance standards by publishing company registers

The Isle of Man has joined fellow Crown Dependencies, Jersey and Guernsey, in adopting a public register of company beneficial ownership information.

The move will see records made available to the public by 2023, with the aim to create consistency with the EU’s Fifth Money Laundering Directive. Some UK MPs, tax activists and journalists have accused the Isle of Man and the other Crown Dependencies of a lack of transparency with regards company beneficial ownership information.

The commitment   will take place over a three-year period, with a clear plan of action already in place:

  1. 2021: The dependencies plan to merge their registers with their EU equivalents, for access by law enforcement authorities and financial intelligence units.

  2. 2022: Businesses will be given access in order to do their due diligence.

  3. 2023: The governments of Guernsey, Jersey and the Isle of Man will bring legislation before their parliaments to make their registers publicly available.

A divisive move

At Quinn Legal, we recognise that the world has changed, and the debate has moved forward over recent years. However, it is important to state that the Isle of Man remains one of the best regulated jurisdictions, meeting all international obligations in terms of compliance standards. The Isle of Man continues to be at the forefront in leading improvements in this regard.

A key aspect to the Isle of Man being such a well-regulated jurisdiction, is that all information with regards beneficial ownership is already available to the relevant authorities upon request. The Corporate and Trust Service Providers are already exceptionally well regulated.

However, the Isle of Man has rightly remained cautious and has taken a considered view in the debate surrounding public registries. For example, there is a fine balancing act between having information in the public domain and the right to privacy. There is also the issue of a “level playing field” whereby the issue isn’t actually solved, it’s just passed onto another jurisdiction.

Despite these concerns, Howard Quayle, Chief Minister of the Isle of Man, has a positive outlook and has said that EU rules created a ‘clear direction of travel.’ He said:

“it is in all our strategic interests and our standing as responsible jurisdictions to commit to further develop the accessibility and transparency of our register of beneficial ownership for companies,”

Stephen Savage, Head of Business at Quinn Legal, feels that the move shows the Isle of Man’s continuing commitment to robust regulation, but remains cautious of the impact this new legislation might have:

“The Isle of Man has been at the forefront in its adoption of international compliance standards, for example being an early adopter of the OECD’s Common Reporting Standard and the second country in the world to sign up to base erosion and profit shifting guidelines. This announcement about the creation of a public register of beneficial ownership of companies clearly reflects the continuing commitment the Island has to international standards. 

He continued:

Having said that, a public register of beneficial ownership of companies does raise perfectly legitimate questions about the maintenance of reasonable controls over privacy and we will wait to see whether it will result in a move by some companies to less well-regulated jurisdictions. We at Quinn Legal will continue to monitor the landscape closely over the next 4 years before implementation and shall, as always, be ready to provide considered and clear advice to our clients on the implications these changes might have on their operations.”