In a statement issued this week, Government has announced that it will advance Cayman’s laws to introduce a public register of beneficial ownership information when these types of registers become the international standard and at least implemented by EU Member States by 2023.
“We recognise and fulfil our responsibility to the globally interconnected financial system to prevent the use of our jurisdiction for hiding and transferring illicit funds around the world,” a release from Government read.
Government went on to say that such a move needed to be undertaken by many other countries in order to have an impact.
“In such a globally interconnected framework, transparency standards had to be widely adopted and effectively implemented in order to have a tangible impact,” it said. “The United Kingdom has been a leader in championing such standards, and the European Union has further advanced these principles in the EU fifth Anti-Money Laundering Directive (5th AMLD). We support these principles and commit to further develop the accessibility and transparency of our systems for beneficial ownership of companies consistent with emerging international standards.”
Government also confirmed that this commitment was made “with due regard to the protection of and proportionate safeguards for fundamental rights of individuals, in particular the right to privacy, the protection of personal data and the presumption of innocence.”
The Government’s intention to introduce a public register of beneficial ownership is in line with evolving standards and international obligations such as those reflected in the principles of the EU 5th Anti Money Laundering Directive and follows the announcement of similar moves 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,” a Government statement read.
Premier Alden McLaughlin said the Government had committed to introduce a public register of company beneficial ownership when it becomes an international standard and that time was now approaching.
“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,” he confirmed. “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 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.”
Minister of Financial Services Tara Rivers said these plans reinforced Cayman’s standing as a leading International Financial Centre and Cayman’s 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. We stand ready to work collaboratively with other jurisdictions as a common approach emerges in the design and maintenance of verified beneficial ownership registers,” she stated.
Cayman Finance issued a statement in favour of the move.
“Cayman Finance supports the decision by the Cayman Islands Government to introduce a public register of beneficial ownership in line with evolving global standards and practices within a timeframe that aligns with UK legislation and the EU 5th Anti Money Laundering Directive,” it said.
“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. That commitment has contributed significantly to the Cayman Islands achieving the same OECD rating for transparency as countries like the UK, US, Germany, Canada and Australia.
Cayman, it said, was already ahead of the game in this respect, having had its own system of verifying beneficial ownership for a good while.
“Our industry has also actively supported Cayman’s verified ownership regime for more than 15 years even though verification of ownership information is not yet a standard achieved by most other jurisdictions, who still rely on less accurate registers of self-reported information,” it said.
The association said now that the UK and EU were establishing an emerging global standard for ownership registers to be public, the Cayman Islands financial services industry would work closely with the Cayman Islands Government to ensure Cayman met that standard also.