The Government of the Cayman Islands has formally announced its intention to introduce a public register of beneficial ownership.
The announcement comes as attention continues to be focused on transparency in the global offshore financial sector, especially in leading centres such as the Cayman Islands, other UK Overseas Territories and Crown Dependencies.
The Cayman Islands has always been firm its stance on transparency in its internationally-recognised and lucrative financial sector, of the world’s leaders.
In a statement, the government stressed “financial secrecy is not tolerated in our jurisdiction.
It said, “for many years (it) understood the importance of collecting and maintaining verified beneficial ownership information, and in fact, a further enhancement of information sharing has been achieved through the Exchange of Notes with the UK.”
The Hon. Alden McLaughlin, Premier of the Cayman Islands, said: “Since 2013 my Government has committed to introducing a public register of company beneficial ownership when it becomes an international standard.”
He went on to state; “I am proud that the Cayman Islands has worked so well with law enforcement and tax authorities the world over, and that the level of transparency of our regime has been recognised by key international bodies and other governments.
The timeline we have announced today recognizes 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.”
According to the government, “while undue focus is often placed on our jurisdiction, we fully appreciate the need to ensure coherent and efficient registration and exchange of beneficial ownership information to facilitate the transparent flow of legitimate capital.”
This falls under what is known in UK legislation as the Sanctions and Anti-Money Laundering Act of which the public register of beneficial ownership is a key component.
While no exact date for implementation was given, the government of Premier Alden McClauughlin said its decision was “in line with evolving standards and international obligations such as those reflected in the principles of the EU 5th Anti Money Laundering Directive.”
It also pointed out that its commitment to enact the relevant legislation “follows the announcement of the same made earlier this year by the British Crown Dependencies.”
“The commitment to introduce publicly accessible registers on a timeline that reflects the development and evolution of public registers in the UK and EU, confirms our ongoing commitment to meeting international standards, and to adapting proactively as global best practice evolves,” the government emphasised.
The Overseas Territories and Crown Dependencies have been under pressure by London to allow public disclosure of company beneficial ownership.
An inquiry into the future of relations between the UK and its overseas territories by the UK’s parliamentary Foreign Affairs Committee(FAC) recommended that it be instituted without delay, even going as far as calling it "a matter of (UK) national urgency".
But there has consistently been vigorous pushback from OTs, especially the Cayman Islands, arguing that current local provisions meet international standards - and exceded them in some instances.
The long-standing contentious issue was a focal point of the 2017-2018 review of relations between the UK Overseas Territories by the FAC.
In its response to the FAC's report, the British government had said it would “prepare an Order in Council by the end of December 2020, with the Territories expected to have fully functioning publicly accessible registers as soon as possible, and no later than the end of 2023.”
But in its announcement confirming that it was committed to instituting the system in keeping with global trends, the Cayman Islands defends its reputation as having “a long history of upholding international standards and working cooperatively with tax and law enforcement authorities in other jurisdictions.”
Minister of Financial Services, the Hon. Tara Rivers said: “The plans announced today reinforce our standing as a leading International Financial Centre and our commitment to global best practice.
“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.”
Minister Rivers also declared that the Cayman Islands “stand ready to work collaboratively with other jurisdictions as a common approach emerges in the design and maintenance of verified beneficial ownership registers.”
The government maintains that it has “often acted at the forefront of initiatives to enhance tax cooperation and transparency and have worked assiduously to combat money laundering and counter the financing of terrorism.”
“Independent assessments by international organisations bear out this fact,” it insisted.