It's a global game

The 2014 FIFA World Cup kicks off in Brazil this week and although I am more of a rugby fan, it is hard to dispute that football is a truly global game. Even the US, renowned for its love of baseball, basketball and American football, is embracing 'soccer' with its national side yet again making it to the finals this year.

No doubt during the next month there will be plenty of comments about the refereeing decisions (especially where England are concerned) but at least everyone is playing by the same rules. Contrast this with the position on proposals for greater transparency surrounding beneficial ownership of companies and similar entities, such as trusts and foundations.

In the Queen's speech last week, it was announced that the UK government will introduce a Small Business, Enterprise and Employment Bill. The headline-grabbing parts include making finance more accessible to small businesses, cutting red tape and cracking down on zero-hours contracts.

However, the accompanying briefing notes to the Bill also state that another main element is to "strengthen the reputation of the UK as a trusted and fair place to do business, by increasing transparency around who owns and controls UK companies with a register of beneficial ownership".

Central public register

We don't have much more detail now, although it has been well trailed that the UK government is proposing a central public register of company beneficial ownership. Indeed, writing an open letter to the British crown dependencies and overseas territories in April, David Cameron, the UK prime minister, said that this would be a key legacy of the country's presidency of the G8.

Yet, as part of the fourth anti-money laundering directive, the EU is considering another set of proposals for a central public register of ultimate beneficial ownership of all legal entities, including companies, trusts and foundations. This has been passed by the European parliament but it now has to work through the details of the legislation with the European Commission and the Council of Ministers.

The White House announced at the end of May that it is now considering a register on corporate beneficial ownership but one which can only be accessed by the relevant authorities. Indeed, a paper from Stikeman Elliott says that "neither Canada nor the US appear to be contemplating legislative changes similar to those endorsed by the European Parliament". Those same sentiments could also be applied to Russia judging by what we have seen of its proposals.

The European model has already raised concerns among potential clients around the world who, quite legitimately, want their affairs to remain confidential. Business leaders in the UK have expressed fears that a public register may damage business prospects, with clients refocusing their inward investment on areas of the world with less stringent requirements. Other interest groups in the UK have highlighted how a public register could pose a security issue, raises questions about data privacy and has human rights implications.

Level playing field

In Guernsey, we already regulate our corporate service providers, who are required to keep records on beneficial ownership, so we think that we are ahead of the curve. We welcome the moves of other jurisdictions to enhance their regimes but we, and other like-minded territories, believe that the most effective route forward is for the development of a truly global level playing field on beneficial ownership.

Guernsey was an early adopter and many other jurisdictions around the world are also now signing up to the OECD's common reporting standard for tax transparency and exchange of information. This is precisely because it has provided a global benchmark that greatly reduces the room for arbitrage in pursuit of commercial gain and will assist in dealing with tax evasion.

We will watch with interest the progress of all international proposals. In context, we will continue to review our action plan on beneficial ownership.

Fiona Le Poidevin is the chief executive of Guernsey Finance

She writes a regular blog about Guernsey for Private Client Adviser