UK eases pressure on overseas territories over company ownership registers

Asset recovery expert Alan Sheeley of Pinsent Masons, the law firm behind Out-Law.com, said that implementing a central registry of companies' beneficial owners was not the only way to pursue so-called 'shell' companies for assets lost to fraud. However, more transparency certainly made the position quicker and easier for victims of fraud, for whom time was often of the essence, he said.

Sheeley was commenting on reports that Foreign Office minister Grant Shapps had accepted the position of the Cayman Islands not to implement such a register, as reported by the Guardian newspaper. The Cayman Islands, along with Bermuda and the British Virgin Islands, has rejected proposals to introduce beneficial ownership registers following domestic consultation.

Local press reported that the Cayman Islands was drawing up a new proposal, under which company registrars would be required to make information on company ownership available to law enforcement agencies within 24 hours of a request being made. Alden McLaughlin, the Cayman premier, said that this would be ready to present to the UK in time for the next joint ministerial meetings between the two countries, in London in November.

The UK committed itself to the creation of a central registry of companies' beneficial owners, meaning those that hold more than 25% of a company's shares or voting rights, as part of its G8 presidency in 2013. The register, which will be made available for public inspection at Companies House, is due to be up and running next April. Last year, UK prime minister David Cameron wrote to the overseas territories asking them to consider doing the same.

During a visit to the Cayman Islands last week, Shapps said that the countries did not disagree on the need for more transparency over company ownership, but that there was "more than one way to skin a cat" in terms of accessing that information. He said that the principle was "really straightforward: there needs to be certainly, for law enforcement agencies and bodies, the ability to find out who owns what in a transparent way and not only that for that information to be quickly and efficiently available so a single request could go in and the information can be provided".

"It is a real shame that offshore jurisdictions are not keen on providing greater transparency," said Alan Sheeley of Pinsent Masons.

"Shapps is correct in that there is 'more than one way to skin a cat'. However, from a civil fraud perspective - and in particular when bringing asset recovery proceedings - these different ways all take time and money. It appears that victims will have to continue to use specialist civil fraud solicitors to seek various types of disclosure orders in these offshore jurisdictions to ultimately identify beneficial owners to trace their assets. It seems crazy that in modern society, victims should be at such a disadvantage in the fight to recover ill-gotten gains from fraudsters," he said.