Cayman commits to public BO registers
The Cayman Islands Government has confirmed it will introduce the controversial public register showing the beneficial owners of all financial entities domiciled in this jurisdiction by 2023, in line with the emergence of these registers across Europe, officials said.
The issue caused considerable controversy when the UK parliament passed an amended bill in May 2018 which included a demand that British Overseas Territories begin adopting public registers by the end of 2020.
Since the Sanctions and Anti-Money Laundering Bill was passed in the UK, the government there has eased back on the timelines. Governor Martyn Roper has also delivered the message that the UK would be pressing for public ownership registers to become the global standard and its territories would not have to go it alone.
At the time, however, the passage of the legislation drew fury from the government here and in other overseas territories because it was seen as a colonial imposition on devolved issues. Premier Alden McLaughlin, who led the charge, said that if the UK tried to impose an order-in-council, he would take this to the courts, and that Cayman would not be changing any laws to introduce public registers until everyone did so.
It also led to talks between the CIG and the UK over changes to our current constitution. While some changes have been agreed in principle, they have not been finalised. The current UK government continues to lurch from leadership crisis to Brexit crisis on a daily basis and appears to have little room to deal with any other political issue.
Over the last year or so, however, there appears to have been a growing acceptance of the inevitability of the introduction of these public registers, which has been further cemented by the EU’s 5th Anti-Money Laundering Directive, which will see member states introduce open registers by 2020. While the UK already has a public register, it is in need of reform, a point that has led the Cayman authorities to argue that it takes time to create an effective platform.
Announcing the decision in a press statement at midnight on Tuesday, the Cayman government said that in line with evolving standards and international obligations, it was committed to introducing publicly accessible registers on a timeline reflecting their development and evolution in the UK and EU.
“Since 2013 my government has committed to introducing a public register of company beneficial ownership when it becomes an international standard,” McLaughlin stated. “The introduction of the UK’s public beneficial ownership register, the EU 5th Anti Money Laundering Directive and similar actions by other jurisdictions represents a shift in the global standard and the practices used to combat illicit activity.”
The premier said he was proud that Cayman had worked with law enforcement and tax authorities the world over as the level of transparency here has been recognised by key international bodies and other governments.
“The timeline we have announced today recognises the work necessary to create a register that is sufficiently robust, capable of suitable levels of interoperability and that will avoid the redesigns that the UK now has to undertake,” he added.
Financial Services Minister Tara Rivers said the commitment reinforced Cayman’s standing as a leading International financial centre.
“It is appropriate that other jurisdictions with developed financial services industries follow suit, and we will make every effort to support the global development and implementation of evolving international standards in this area,” she said. “We stand ready to work collaboratively with other jurisdictions as a common approach emerges in the design and maintenance of verified beneficial ownership registers.”
With the rhetoric of betrayal and the fury of “constitutional overreach” and “colonial despotism” seemingly died down, the government appears set to move towards the open registers over the next few years. Government has stated that “financial secrecy is not tolerated” in this jurisdiction and that undue focus was placed on the Cayman Islands. But it appreciated the need to ensure coherent and efficient registration and exchange of beneficial ownership information to facilitate the transparent flow of legitimate capital.
Cayman Finance, the non-profit organisation that represents the offshore sector, welcomed the government’s announcement. A spokesperson said the association supported the decision to introduce a register in line with evolving global standards.
“The Cayman Islands’ position as a premier global financial hub is based, in part, on our industry’s long-standing commitment to the highest global standards for transparency and cross-border cooperation with tax and law enforcement authorities,” the industry body stated, adding that the sector had supported Cayman’s verified ownership regime for more than 15 years, even though that had not been achieved by most other jurisdictions which have less accurate registers of self-reported information.
But now the UK and EU were using technology to establish an emerging global standard for ownership registers to be public, the Cayman Islands financial industry would work with the government here so that Cayman meets the new standard.
“Our commitment to the highest global standards for transparency with tax and law enforcement authorities is already a key reason why leading international investors prefer to do business in the Cayman Islands, so we are very confident they will continue to do so,” Cayman Finance added.
Since the Sanctions and Anti-Money Laundering Bill was passed in the UK, the government there has eased back on the timelines. Governor Martyn Roper has also delivered the message that the UK would be pressing for public ownership registers to become the global standard and its territories would not have to go it alone.
At the time, however, the passage of the legislation drew fury from the government here and in other overseas territories because it was seen as a colonial imposition on devolved issues. Premier Alden McLaughlin, who led the charge, said that if the UK tried to impose an order-in-council, he would take this to the courts, and that Cayman would not be changing any laws to introduce public registers until everyone did so.
It also led to talks between the CIG and the UK over changes to our current constitution. While some changes have been agreed in principle, they have not been finalised. The current UK government continues to lurch from leadership crisis to Brexit crisis on a daily basis and appears to have little room to deal with any other political issue.
Over the last year or so, however, there appears to have been a growing acceptance of the inevitability of the introduction of these public registers, which has been further cemented by the EU’s 5th Anti-Money Laundering Directive, which will see member states introduce open registers by 2020. While the UK already has a public register, it is in need of reform, a point that has led the Cayman authorities to argue that it takes time to create an effective platform.
Announcing the decision in a press statement at midnight on Tuesday, the Cayman government said that in line with evolving standards and international obligations, it was committed to introducing publicly accessible registers on a timeline reflecting their development and evolution in the UK and EU.
“Since 2013 my government has committed to introducing a public register of company beneficial ownership when it becomes an international standard,” McLaughlin stated. “The introduction of the UK’s public beneficial ownership register, the EU 5th Anti Money Laundering Directive and similar actions by other jurisdictions represents a shift in the global standard and the practices used to combat illicit activity.”
The premier said he was proud that Cayman had worked with law enforcement and tax authorities the world over as the level of transparency here has been recognised by key international bodies and other governments.
“The timeline we have announced today recognises the work necessary to create a register that is sufficiently robust, capable of suitable levels of interoperability and that will avoid the redesigns that the UK now has to undertake,” he added.
Financial Services Minister Tara Rivers said the commitment reinforced Cayman’s standing as a leading International financial centre.
“It is appropriate that other jurisdictions with developed financial services industries follow suit, and we will make every effort to support the global development and implementation of evolving international standards in this area,” she said. “We stand ready to work collaboratively with other jurisdictions as a common approach emerges in the design and maintenance of verified beneficial ownership registers.”
With the rhetoric of betrayal and the fury of “constitutional overreach” and “colonial despotism” seemingly died down, the government appears set to move towards the open registers over the next few years. Government has stated that “financial secrecy is not tolerated” in this jurisdiction and that undue focus was placed on the Cayman Islands. But it appreciated the need to ensure coherent and efficient registration and exchange of beneficial ownership information to facilitate the transparent flow of legitimate capital.
Cayman Finance, the non-profit organisation that represents the offshore sector, welcomed the government’s announcement. A spokesperson said the association supported the decision to introduce a register in line with evolving global standards.
“The Cayman Islands’ position as a premier global financial hub is based, in part, on our industry’s long-standing commitment to the highest global standards for transparency and cross-border cooperation with tax and law enforcement authorities,” the industry body stated, adding that the sector had supported Cayman’s verified ownership regime for more than 15 years, even though that had not been achieved by most other jurisdictions which have less accurate registers of self-reported information.
But now the UK and EU were using technology to establish an emerging global standard for ownership registers to be public, the Cayman Islands financial industry would work with the government here so that Cayman meets the new standard.
“Our commitment to the highest global standards for transparency with tax and law enforcement authorities is already a key reason why leading international investors prefer to do business in the Cayman Islands, so we are very confident they will continue to do so,” Cayman Finance added.
