Gibraltar’s Beneficial Ownership Registers Face Uncertain Future Amid Global Shift in Transparency Standards

Global Reversal on Public Access to Beneficial Ownership Information

The governments of several Overseas Territories, including Jersey, Guernsey, Isle of Man, British Virgin Islands (BVI), Cayman Islands, and others have recently backtracked on their commitments to establish publicly accessible registers of beneficial ownership (PARBOs) for companies. This decision has significant implications for the territories’ financial centers and relationships with the UK.

Rationale Behind the Change

The move comes after the European Union’s Court of Justice ruled that the EU’s Fifth Anti-Money Laundering Directive, which required full public access to beneficial ownership information, was invalid due to concerns over private life and personal data protection. This ruling has led several jurisdictions to reconsider their approach to transparency standards.

Impact on Gibraltar

Gibraltar, a UK Overseas Territory that is part of the EU, had already established its own PARBO through the Register of Ultimate Beneficial Owners, Nominators and Appointors Regulations 2017. However, the territory’s Chief Minister, Fabian Picardo, has protested against the UK’s move as an “unacceptable act of modern colonialism” that would call into question the relationship between Gibraltar and the UK.

Uncertainty Surrounding the UK Government’s Approach

The UK government’s use of its powers under the Sanctions and Anti-Money Laundering Act 2018 to force compliance with PARBO requirements in Overseas Territories is now uncertain. Other territories may follow the example of BVI and Cayman, or the UK government may decide to align itself with the EU’s new approach.

Gibraltar’s Dilemma

Gibraltar could soon face a dilemma as it balances its obligations under EU law and standards of transparency with the UK’s PARBO requirement. If an EU consensus emerges around a “legitimate interest” test for access to beneficial ownership information, Gibraltar may find itself caught between two conflicting approaches.

Key Players Involved

• Jersey
• Guernsey
• Isle of Man
• British Virgin Islands (BVI)
• Cayman Islands
• UK Government
• European Union’s Court of Justice
• Gibraltar

Possible Outcomes

• The UK government may decide to align itself with the EU’s new approach.
• Other territories may follow the example of BVI and Cayman.
• Gibraltar may find itself caught between two conflicting approaches.
• The relationship between Gibraltar and the UK may be called into question.