22/11/24

TURKS AND CAICOS: Companies Amendment Bill 2024 to combat financial crime and enhance transparency, says Attorney General

As published on: suntci.com, Friday 22 November, 2024.

Attorney General of Turks and Caicos Islands, Rhondalee Braithwaite-Knowles, KC, has assured that the Companies Amendment Bill 2024 will address financial crime and illicit activities, while balancing privacy rights. The proposed legislation aims to establish a publicly accessible register of beneficial ownership within the islands.

Braithwaite-Knowles, who made this disclosure during a House of Assembly session on Thursday, November 14, 2024, asserted that the bill represents a significant step toward greater transparency in the financial and corporate sectors, aligning the territory with global standards.

This bill, along with the Limited Partnerships Amendment Bill 2024, is designed to create a robust framework for tracking the true owners behind companies and limited partnerships, ensuring that the Turks and Caicos Islands (TCI) remain compliant with international standards.

“The proposals contained in these bills are rooted in the global movement toward greater transparency regarding corporate structures such as companies and limited partnerships,” Attorney General Braithwaite-Knowles told the House during her presentation.

She further explained that these legislative changes are part of a broader commitment by overseas territories, including TCI, to establish publicly accessible beneficial ownership registers by the end of 2024.

Currently, Turks and Caicos Islands maintains a beneficial ownership register, but it is only accessible to law enforcement agencies, including the Royal Turks and Caicos Islands Police Force. The proposed amendment seeks to expand this access in a limited manner, allowing certain individuals and entities to view the data based on a “legitimate interest” criterion. This is intended to strike a balance between transparency and the protection of individual privacy, which is constitutionally safeguarded in the islands.

"This proposal represents one step further in terms of transparency, creating a register that is publicly accessible, but limited in scope," stated Braithwaite-Knowles. “It would only be available on the basis of legitimate interest.”

The Attorney General emphasized that only those who meet criteria set out in regulations would be able to access the beneficial ownership information. This ensures that the public register cannot be exploited for purposes that may violate privacy or expose individuals to harm.

The establishment of a publicly accessible beneficial ownership register has been a long-standing goal, following the United Kingdom’s directive to its Overseas Territories. TCI has been working diligently to meet the agreed deadline, with Braithwaite-Knowles underscoring that by December 2024, the framework for the register would be fully operational. The bill envisions a system where regulators, law enforcement, and other key authorities can access ownership details to detect and prevent illicit financial activities such as money laundering and tax evasion.

However, the Attorney General was careful to note that the bill also seeks to prevent the misuse of this information.

"There are concerns—legitimate concerns—raised about people’s safety and security if certain information were so freely accessible that individuals could simply go on a fishing expedition," she explained. This is why the register will implement a “legitimate interest test” that includes criteria for journalists and other stakeholders who can demonstrate a valid reason for accessing such sensitive data.

The concept of a "legitimate interest" test, Braithwaite-Knowles elaborated, is designed to ensure that the beneficial ownership data is only accessible to those who can demonstrate a bona fide need, such as for investigative or regulatory purposes.

"The TCI is adhering to international standards and respecting the written constitution that we have," the Attorney General affirmed, pointing out that similar legal frameworks are being implemented across other overseas territories.

The amendments introduced in the Companies Amendment Bill 2024 are also part of a broader effort to streamline the regulatory environment. As Braithwaite-Knowles highlighted, the bill aligns the requirements for companies and limited partnerships, providing clarity on the registration process and the responsibilities of licensed agents. The bill will also enhance the transparency of ownership structures by stipulating the duty of registrable persons to disclose beneficial ownership information.

In practical terms, the amendment will enable greater access to the central registry by authorities such as the Royal Turks and Caicos Islands Police Force, the Anti-Money Laundering Committee, the Financial Intelligence Agency, and the Integrity Commission, among others. These entities will be empowered to review the beneficial ownership details, assisting them in investigations and efforts to ensure compliance with anti-money laundering regulations.

“The amendments to the Limited Partnerships Ordinance… would streamline the requirements for limited partnerships with those for companies under the Companies Ordinance,” Braithwaite-Knowles noted. This harmonization is intended to reduce complexity in regulatory processes, ensuring that the islands remain competitive and attractive to investors while adhering to international best practices.

The legislation has undergone a comprehensive review process, with extensive consultations involving both public and private sector stakeholders. Key contributions have come from the Financial Services Commission, the Ministry of Finance, and the Anti-Money Laundering Committee, among others. Braithwaite-Knowles also acknowledged the tireless work of Mrs. Kenisha L Bacchus, the Acting Managing Director of the Financial Services Commission, who has been instrumental in the development of these proposals.

"She has been there for 20 years now," the Attorney General remarked, recognizing Bacchus's significant role in shaping the regulatory landscape.

Notably, Braithwaite-Knowles stressed that the implementation of the beneficial ownership register and the related amendments to the Companies Ordinance and Limited Partnerships Ordinance will not only strengthen the islands’ regulatory framework but will also ensure that the TCI maintains its commitment to global standards in combating financial crime. This includes ensuring that the jurisdiction remains in compliance with international obligations, which could evolve in the future.

The proposed amendments also reflect the growing awareness within TCI’s financial services sector that international expectations are shifting. "We are aware that the TCI may further open access to the central registry for beneficial ownership information in keeping with changing commitments and international obligations," said Braithwaite-Knowles. "But at this time, we are meeting the commitment that was made approximately three years ago."

As part of the broader agenda, the amendments are designed to ensure that the islands' financial services sector remains competitive while adhering to rigorous standards of transparency and integrity. The public-private consultations that have shaped these proposals are indicative of the collaborative approach taken by the TCI government to address the evolving demands of international financial regulators and investors.

While the bill is designed to strike a balance between transparency and privacy, it also recognizes the evolving nature of global standards. “We are committed to ensuring that our jurisdiction remains viable in a competitive and well-regulated financial services sector,” Braithwaite-Knowles stated.

"We understand that our commitments may evolve, but we are taking these first steps to ensure we are meeting the standards expected of us."

In conclusion, the Companies Amendment Bill 2024 is a vital component of the Turks and Caicos Islands' efforts to foster a more transparent and accountable financial environment. By expanding access to beneficial ownership information while safeguarding privacy rights, the bill sets the stage for TCI to maintain its standing as a reputable financial hub in the Caribbean. As the bill progresses through the legislative process, it will continue to receive scrutiny and contributions from various stakeholders to ensure its effectiveness and alignment with international best practices.

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Turks and Caicos Companies Amendment Bill Financial Crime