Thread by @andywightman

THREAD Ownership of land and property by entities registered in secrecy jurisdictions has been a problem for decades. My view is that such entities should be barred from owning property in Scotland. But they continue to be allowed. 1/12

To increase transparency of such entities (and others such as Trusts, and Partnerships), the Scottish Parliament passed regulations to establish a “Register of Persons Holding a Controlled Interest in Land” this comes into force on 1 April 2/12 legislation.gov.uk/ssi/2021/85/co…

It will require such entities to declare who has a controlling interest. They have a year to comply. Failure to comply or to declare truthfully is an offence punishable with a fine of £5000. There is no requirement for any verification of the declaration 3/12

The Scottish regulations are retrospective and thus covers all entities no matter when they acquired their interest and so a Cayman Islands company that has owned land since 1950 will have to declare any controlling interests. 4/12

There are exceptions to the requirement to register and the most important is UK registered companies on the basis that there is already a PCS regime in place (but the PCS may well be an offshore company so that’s not much help) 5/12

PS interpreting the legislation is a nightmare and it is not clear what much of it means in practice. 6/12

Today, the UK Government introduced the Economic Crime (Transparency and Enforcement). it includes the long awaited establishment of a “Register of Overseas Entities” This will require any legal entity governed outside the UK to declare its beneficial ownership 7/12

The Bill applies to the whole of the UK and is retrospective to 2002 in E&W but only Dec 2014 in Scotland 8/12 FACTSHEET here gov.uk/government/pub… BILL here publications.parliament.uk/pa/bills/cbill…

The Bill includes a process of verification (absent in Scottish Regulations) and has much tougher sanctions (up to 5 years in prison) for failures to comply. 9/12

If this Bill passes, the Scottish regulations will need to be amended to avoid duplication (and in any event, the UK Bill is more stringent than the Scottish regulations). 10/12

Will this improve transparency? Yes and no. On paper it will but any regime such as this relies on enforcement. 11/12

With the Crown Office having failed to prosecute any of the 17,000 Scottish Limited Partnerships that have failed to comply with reporting duties, it is unlikely they will have time or inclination to pursue failures here. Time will tell 12/12 ENDS