80% say no to ownership register
(CNS Business): Government released a report Tuesday on the public consultation it carried out earlier this year regarding how the jurisdiction should tackle the issue of access to who really owns offshore entities registered in the Cayman Islands. The report revealed that over 80% of the people and organizations that responded do not believe Cayman needs a central register with public access and opted for the status quo, leaving the collection of information to the corporate service providers.
Most of those who took part in the consultation said a publicly accessible central registry would create a significant financial burden, violate privacy and information security and put the offshore industry at risk.
Participants raised concerns that the cost to clients of doing business in Cayman would lead many companies to shift to more cost-friendly jurisdictions without a public central register if CIG introduced such access before it becomes a global standard.
“This would have a material adverse impact on the economy of the Cayman Islands,†the report noted.
The government said that, although the Cayman Islands has not experienced disproportionate occurrences of financial crime, it would continue to evaluate the legal and beneficial ownership regime and implement improvements in order to mitigate and eliminate abuse of the system.
“Continuing to improve our system, in ways that support sound business growth locally and globally, therefore remains our position; it simply is the right thing to do. The results of this consultation, as well as previous third-party assessments, have assisted Cayman in identifying areas for enhancement in our legal and beneficial ownership regime, which are set forth in the conclusion of this report,†government stated in its response to the feedback.
In the report, government notes that the Financial Action Task Force (FATF) Recommendations outline three avenues by which a country can comply with the global availability of information standard.
Financial Services Minister Wayne Panton noted that the UK is now taking steps to adhere with the standard via one of these avenues, by consolidating information into a central register, and that the UK has been in discussion with its crown dependencies and overseas territories regarding whether central registers should be implemented in their jurisdictions as well.
However, he pointed out that that Cayman has been adhering to the global standard for more than a decade, by providing this information to law enforcement, tax and regulatory authorities from data collected, verified and maintained by licensed and regulated corporate service providers. He said that both of these methods are acceptable under the FATF Recommendations.
Government’s report also notes that although they are global in nature, the FATF Recommendations allow jurisdictional flexibility – not in the intended outcome of the recommendations, but in how that outcome is achieved. Furthermore, Cayman’s CSP regime adheres to the core set of principles in the G20’s High-Level Principles on Beneficial Ownership Transparency, which was issued in November this year.
For these reasons, Government states in its report, “Until such time as there is global agreement on appropriate exemptions and safeguards, and this becomes the internationally practiced standard, the Cayman Islands will continue to follow its CSP regime.”
Also in the report, Government outlines steps that it will take to further strengthen Cayman’s framework through enhanced accuracy, access, availability and monitoring/enforcement of ownership information.
Although Premier Alden McLaughlin made it clear at the JMC meeting in London last month that neither Cayman nor the other regional OTs would introduce public central registers, despite the UK government’s decision, the recent vote by the European Union in support of such public registers across the continent may see the UK continue to apply pressure to Cayman despite this decision.
Category: Finance, Financial Services
A vote in support of something by the EU is different from the EU actually doing it. As the Government keeps (rightly) saying: ‘when una do it, come talk to us’. Until then, as the Government also points out, we’re as compliant as they are with the international standards they agreed to. Stop moving the goal posts for other people.