U.K. Drops Debate on Key Brexit Bill Over Offshore Secrecy Spat

(Bloomberg) --

The U.K. government pulled a debate on a key piece of Brexit legislation after Jersey, Guernsey and the Isle of Man warned against plans to force an end to secret company ownership.

The main sticking point is a proposed cross-party amendment to the Financial Services Bill led by former International Development Secretary Andrew Mitchell. It calls for British overseas territories and crown dependencies to publish a register of the real owners of companies by the end of 2020 -- three years earlier than the U.K. government planned to make it obligatory.

“It is a respected constitutional position that the U.K. does not legislate for the Crown Dependencies on domestic matters without our consent,” the three dependencies said in a statement. Several proposed amendments relating to company registers run “contrary to the established constitutional relationships” and “would produce inoperable legislation,” they said.

The Financial Times reported that leaders of the three jurisdictions would travel to London on Monday to warn against the proposals.

Debate on the bill -- considered vital in the event the U.K. leaves the European Union without a deal on March 29 -- was originally scheduled to start on Monday afternoon and conclude by 10 p.m., before ministers pulled it from the day’s proceedings.

“The beneficial ownership amendments were tabled on Thursday, and we want to give them proper and thorough consideration,” the Treasury said in an emailed statement. “The government will not move the Bill today but will reschedule it to ensure that there is sufficient time for proper debate.”

The opposition Labour Party’s junior finance spokesman, Jonathan Reynolds, criticized the cancellation on Twitter, saying Labour had planned to support the push on corporate transparency.

“There were amendments on preventing a ‘race to the bottom’ on financial deregulation and on transparency for the Overseas Territories and Crown Dependencies that we had hoped to pass,” Reynolds said.

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