New calls for a Channel Islands’ confederation

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Proposals brought before the UK Parliament, which aim to force Jersey, Guernsey and the Isle of Man to introduce public registers of company ownership could threaten the islands’ autonomy if approved.

Dozens of high-profile backbench MPs signalled their support for the proposals before they were pulled from debate on Monday.

However, Conservative MP Andrew Mitchell and Labour’s Dame Margaret Hodge have indicated that they will bring the matter back, and House of Commons speaker John Bercow ruled that the motion would be allowed – branding the decision from UK ministers to withdraw the debate a ‘rum business’.

The plans were brought as amendments to a wider Financial Services Bill lodged by the UK government to ensure measures were in place in the event of a no-deal Brexit.

External Relations Minister Ian Gorst has said that the Crown Dependencies would ‘strongly object’ to the measures and added that the current constitutional issues were likely to lead to further discussions about a Channel Islands’ confederation – although no formal discussions about that have yet been held.

Mr Mitchell and Dame Margaret believe that the issue surrounding financial transparency and public registers can be decided upon by Westminster, as they relate to ‘national and international security’.

Senator Gorst said: ‘This is not an international matter. It is not a matter of national security. We share our information with the UK’s National Crime Agency and send letters of exchange with the Home Office.

‘We are already right at the top of international standards. There is no international standard that supports the methodology of the UK [for public registers].

‘The UK cannot legislate for the Crown Dependencies around matters of good governance. This is a completely domestic issue.’

Currently, Jersey has a register of beneficial ownership, and the information can be accessed by regulators and authorities for the prevention of crime. Senator Gorst said that the Island’s commitment to financial transparency already ranked the Island among the world’s leading jurisdictions.

Guernsey Chief Minister Gavin St Pier wrote an open letter earlier this week to the 40 or so MPs who had committed to back the legislation.

In it, he raised fundamental concerns that the UK parliament passing such a law in this way for the Crown Dependencies would breach constitutional conventions.

And Guernsey’s Policy and Resources member with responsibility for external affairs, Jonathan Le Tocq, has spoken in favour of a confederation of the Channel Islands.

Senator Gorst said: ‘Of course it makes it difficult when UK parliamentarians seek to act in this manner.

‘A confederation would make the islands stronger when working together on issues that affect us all.

‘I have been a supporter of a mechanism that allowed us to, on certain matters, work more closely together and have a proper, formalised structure to deal with matters of joint interest.

‘This would be a combined Channel Island committee with elected members from each parliament, and those parliaments would decide which issues to send up to that committee.’

He added that no formal discussions had taken place yet but that ‘in light of Gavin St Pier’s pronouncements, it is something we will probably take up and have a conversation with him about’.

Deputy St Pier set out the constitutional positions of the islands in his letter and said that anyone looking to evade tax or launder money would be ‘foolish’ to try and use Guernsey to do it because of the regulations already in force.

He added: ‘We are separate jurisdictions with our own legislatures, executives and judiciaries with full domestic autonomy.

‘Should these amendments be included in any Act they would lead to inoperative legislation, based on a misunderstanding of the constitutional position. We would challenge it robustly.’

Both Dame Margaret and Mr Mitchell have confirmed they would continue to fight for the introduction of public registers.

Dame Margaret said: ‘The UK already has public registers of beneficial ownership for companies. The Overseas Territories and other European member states are soon to have them too. The amendment I tabled with Andrew Mitchell is designed to bring the whole UK family in alignment on financial transparency. The Crown Dependencies are well-governed jurisdictions but greater transparency is crucial in the fight against money-laundering and tax evasion. The UK and all its jurisdictions must take on the role of global leaders.’

Mr Mitchell also said that he would be writing in response to Deputy St Pier’s letter. However, the JEP had not received a copy of this letter at the time of going to print.

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