Cayman still hopeful it can avoid central register

(CNS): Senior UK officials who visited the Cayman Islands in February to discuss the issue of beneficial ownership reiterated Britain’s position that it could impose its preferred approach on the islands, which is an open central register, through legal means, the Financial Services Ministry stated in a release. However, even after the damning revelations in the Panama Papers leaked this week, the government believes that the agreement that it is currently negotiating with the UK will satisfy the British government.

The UK is negotiating similar agreements with each of its overseas territories and crown dependencies, even as global opinion is putting pressure on Britain to end tax avoidance schemes in its territories. British Prime Minister David Cameron may be feeling the heat particularly since the Panama Papers revealed that his father ran an offshore fund that avoided paying tax in Britain.

The Cayman Islands Government (CIG), which maintains that its compliance regime is superior to that of other countries, has stated that as an outcome of the visit by British officials, it is finalising an agreement that outlines the joint commitment of the UK and Cayman to the sharing of beneficial ownership information for law enforcement and tax authority purposes.

Noting Britain’s threat to impose relevant legislation regardless, the CIG stated that, “based upon the advanced nature of the discussions to date, we believe it is possible to agree on an ‘exchange of notes’ that is in line with current global standards. We also believe it is possible to agree on a technical protocol, which would make the exchange of notes operational within our law enforcement and tax authorities.”

Under the agreement, Cayman would confirm its commitment to enable the UK (via a designated point of contact in the Cayman Islands) and domestic law enforcement and tax authorities to access company beneficial ownership information without restriction, subject to relevant safeguards.

These competent authorities should be able to quickly identify all companies that a particular beneficial owner has a stake in, without needing to submit multiple and repeated requests. Cayman must also ensure that companies or their beneficial owners are not alerted to the fact that an investigation is underway.

“It is the UK’s intent to have all of the exchanges of notes and the technical protocols with the OTs and CDs signed in advance of the prime minister’s Anti-Corruption Summit in May,” the ministry stated.

To accommodate this timeframe, the UK initially set four weeks to conclude all discussions. However, the ministry said Tuesday, after the Panama Papers leak, that when it became apparent that more time was needed to review the technical protocols, the deadline was extended to Wednesday, 6 April.

“Subject to further input from the UK, Cayman believes it can meet this deadline, as we already demonstrated our proposed centralised platform for the enhanced sharing of beneficial ownership information during the UK’s February visit,” the ministry stated.

It further noted, “Considering the progress that has been made on this complex subject in the timeframe given, Cayman reaffirms its commitment to finalising an agreement with the UK on the Exchange of Notes and the Technical Protocol, which further enhances the sharing of beneficial ownership information among our respective law enforcement and tax authorities.”

Tags: beneficial ownership, Featured

Category: Finance, Financial Services