Dr. Jim Stewart:

The corporate service provider is supposed to provide the beneficial owner of a firm for which it is doing the administration to the Central Bank in order that the Central Bank knows that it is a breach of sanctions. The point I am making is that the corporate service provider may firmly believe that the owner is located in Bermuda, but this is when the corporate service provider did that work one year ago or even six months ago. It may change in the meantime, because the owner wants to hide the assets or whatever. The corporate service provider may firmly and honestly believe that it knows the beneficial owner, whereas the truth is that it does not know the beneficial owner.

It may also be the case that the beneficial owner is disguised in a way in which the ownership of the asset is split among five or more companies, thus reducing the threshold for the definition of a beneficial owner, which is 25%. If it is split among five different owners, the corporate service provider is returning that the firm is owned by one company but, in fact, that company is owned by five other companies. If one amalgamates those, one can work out who the real beneficial owner is. It is very difficult to work out who the true beneficial owner is.

The Central Bank collects largely data to do with financial flows, financial assets and other aspects. The Central Bank does not collect data on beneficial ownership. It collects data on whether the firm is a charitable trust but it does not collect other data on the firm. It is basically collecting data relating to its function as a monetary authority and this is a requirement, certainly for financial vehicle corporations, by the European Central Bank, ECB.