The Financial Action Task Force has recently updated its International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation (the FATF Recommendations): see here. The update relates to Recommendation 24 on the transparency and beneficial ownership of legal persons: see here for further information.
The transcript for Re Sirius Minerals Plc [2020] EWHC 1447 (Ch), a decision of Mr Justice Fancourt from March this year, has recently been added to BAILII. The trial judge sanctioned a scheme of arrangement under section 899 of the Companies Act 2006, noting that the documentation had been sent to the registered members and there was no requirement to send documents to the beneficial owners of shares even if the company had records of these beneficial owners. The trial judge nevertheless noted - and this is why I note the decision here - that the law as it stood raised a "genuine issue about shareholder democracy".The Office for National Statistics has published updated analysis on the ownership of UK quoted company shares: see here. The report notes that the proportion of shares (in terms of value) held by those outside of the UK has reached a record high: 54.9%. The following chart, from the ONS report, indicates the other ownership categories:
The Companies Registration Office has provided an update on the creation of the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies, following the making of the European Union (Anti-Money Laundering: Beneficial Ownership Of Corporate Entities) Regulations 2019: see here. These Regulations contain the obligations on companies to maintain beneficial ownership information as well as the framework for the operation of the new central register. They replace the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016.The Treasury Committee today published its report Economic Crime - Anti-money laundering supervision and sanctions implementations: see here or here (pdf). The accompanying press release is available here. The report's conclusions and recommendations can be read here. The Committee notes that the scale of economic crime is uncertain and that it is difficult to measure. It nevertheless recommends that the Government undertakes more analysis and research concerning the scale and size of economic crime and individual sectors' exposure to it.The UK cannot extol the virtue of a public register of beneficial ownership and yet not carry out the necessary rigorous checks of the information on that register. The Government must urgently consider reform of Companies House to ensure it has the statutory duties and powers to ensure it plays no role in helping those undertaking economic crime, whether here or abroad. It is welcome that the Economic Secretary has noted that BEIS is considering reform in this area, but the Government should move quickly and now publish detail of this reform by summer 2019".
The Government has published its anti-corruption strategy for 2017-2022: see here (pdf). The strategy identifies priorities and proposed actions. It states, amongst other things, that in the current session of Parliament a draft Bill will be published for establishing a public register of beneficial ownership of overseas legal entities where they own or purchase property in the UK or participate in central government contracts (the creation of such a register was the subject of a consultation exercise that concluded earlier this year).
The Beneficial Ownership Act 2017 received Royal Assent last month. The Act - available here (pdf) - replaces the Companies (Beneficial Ownership) Act 2012 (here, pdf). An overview of the new Act is available here. In very general terms, the Act sets out the framework whereby details of those controlling more than 25% of the beneficial ownership of a company are held in the Isle of Man database of beneficial ownership.
The Government has today published a call for evidence as part of its plan to introduce a register of beneficial ownership for overseas companies (and other legal entities) owning property in the UK: see here (pdf). The register will also apply to entities wishing to participate in central government procurement.
The Criminal Finances Bill was introduced in the House of Commons last year and is now proceeding through the House of Lords. Yesterday the Bill received its second reading: see here. The Bill contains, amongst other things, provisions that will introduce a new corporate offence of the failure to prevent the facilitation of tax evasion. Further background information about this new offence is available here. Draft Government guidance is also available: see here (pdf).
Earlier this week the Economic and Monetary Affairs Committee and the Civil Liberties, Justice and Home Affairs Committee agreed amendments to a proposed Directive the purpose of which is to amend the Fourth Anti-Money Laundering Directive. The agreed amendments would permit EU citizens much greater access to companies' beneficial ownership registers (the need to demonstrate a 'legitimate interest' would be removed). The Committees also agreed that trusts (and similar structures) should be subject to greater transparency requirements. For further information: see here.
Earlier this month the Treasury published a consultation paper seeking views on the reforms needed to increase transparency in respect of the beneficial ownership of companies: see here (pdf). Amongst the questions asked are those concerning the definition of beneficial owner, the creation and responsibility for a central register of beneficial ownership, and the obligations imposed on companies and beneficial owners. Responses to the consultation should be made here.
The Ministry of Finance and the Accounting and Corporate Regulatory Authority are consulting on proposed amendments to the legislation governing companies and limited liability partnerships. Amongst the proposals are the following: introducing a new regime for foreign companies wishing to be domiciled in Singapore; removing the requirement for private companies to hold an annual general meeting; and requiring companies and LLPs to hold and maintain beneficial ownership information and to make this available, on request, to law enforcement agencies. For further information is available here.
Last month the Assistant Chief Minister, Senator Philip Ozouf, published a statement outlining Jersey's proposals for the creation of a new register of directors as well as changes to the information on beneficial ownership held on the central register: see here (pdf).
The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 were commenced last month: see here (pdf). The Regulations implement the requirement in Article 30(1) of the Fourth Anti-Money Laundering Directive (Directive (EU) 2015/849) for corporate and other legal entities to hold adequate, accurate and current information on their beneficial ownership. Further information is available on the Companies Registration Office website.
The Department for Business, Energy and Industrial Stragegy has published a discussion paper setting out possible options for the implementation of Article 30 of the Fourth Money Laundering Directive (Directive (EU) 2015/849): see here (pdf).
Article 30 requires, broadly put, that Member States maintain central registers in respect of the beneficial ownership of companies and other legal entities (e.g., unregistered companies, credit unions; building societies). The Government's position is that the UK's existing PSC regime meets most of the requirements of Article 30 but that some additions and amendments are needed including bringing additional entities within the regime.
HM Treasury has published a consultation paper seeking views and evidence to inform the transposition of the Fourth Money Laundering Directive and the Fund Transfer Regulation: see here (pdf). The consultation does not consider the proposed amendments to the Directive announced in the summer (about which, see here, pdf). Chapter 10 of the consultation paper considers beneficial ownership and, in particular, what changes may be required in respect of the PSC register. There is also discussion of beneficial ownership as it relates to trusts and the record keeping and reporting requirements that should be required.
The Securities and Exchange Commission of Pakistan (SECP) has published a final draft of the Companies Bill 2016: see here (pdf). The provisions in red are new and remain under review. Further information about these new provisions, which include those relating to the creation of a register of beneficial ownership and a duty on company officers to prevent the commission of fraud or money laundering, is available in a concept paper published alongside the Bill: see here (pdf). For earlier drafts, see (all pdf): third | second | first.
The Department for Business, Innovation and Skills has published a consultation paper in which it outlines a range of proposals to enhance the transparency of beneficial ownership for foreign companies purchasing land or property in England and Wales, or participating in public contracting in England: see here (pdf).
The States of Guernsey has published a consultation paper on the transparency of beneficial ownership of companies in Guernsey: see here (pdf). The key question asked in the paper is whether Guernsey should establish a central register of beneficial ownership information and, if so, who should have access to it.
