Cayman’s ‘secrecy law’ gets overhaul
Wayne Panton, Minister of Financial Services, Commerce and Environment, in LA 24 June 2016
(CNS Business): The controversial piece of legislation that has been considered Cayman’s ‘secrecy law’ for many years and fueled the jurisdiction’s tax haven label has been repealed and replaced to help detract unwanted and unfair criticism, Financial Services Minister Wayne Panton has said. Along with a number of other changes as well as a new name, the legislation removes the criminal sanction for any breach of confidentiality, which has been one of the problems associated with the Confidential Relationships (Preservation) Law that officials hope will be addressed by the new Confidential Information Disclosure Law.
Presenting the bill in the Legislative Assembly late Friday afternoon, Panton said the law defines the circumstances under which information can legally be disclosed without the consent of the person and to deal with the specific authorities that information can be disclosed to.
Although the current criminal sanction for disclosure has been removed, the law retains a provision for a civil claim by a person who believes their information has been wrongly disclosed and a breach of confidence has taken place. This, Panton said, was in line with other similar jurisdictions and laws dealing with privacy issues in the financial sector.
Explaining the need for change as a result of significant misinterpretation and unwarranted attention, the minister justified the repeal and said the new law would improve Cayman’s reputation.
“The law has served its purpose,” Panton told the LA. “It was a good law with good intentions but over time it has become clear that it is bringing negative publicity and confusion and unwarranted criticism to the jurisdiction.”
Pointing to international standard setters, as well as critical NGOs and the media, both local and international, which Panton said had misinterpreted the law by implying it enables illicit activities, he stated, “Nothing could be further from the truth.”
However, he said, the law and the criminal sanction in particular had fueled the misconceptions. The minister said it had elevated perceptions of secrecy in Cayman that were unjustified and explained this was why some changes to the substance and the name were warranted.
But Panton added that the law would continue to protect legitimate confidential information while enhancing transparency in the financial services sector by clarifying the core objective of how authorities can access information when they need to.
Attorney General Sam Bulgin offered his support to the legislation, which he said had been “unfairly characterised” as secrecy legislation. He said the minister was right because the current law had run its course and was acting as “lightening rod” for negative attention, but the new law and new name would help.
See video below starting at 2:59:34
Category: Finance, Financial Services
Well, as long as my money is not being messed with and the United State Government or any government for that matter to come in stomp their foot and leave with files I am fine with that! So it sounds as if they just changed wording and the security is the same. I do feel that if you are any government official it should be law you can’t have an off shore account and be a “president” for example. If you want to handle countries, millions of lives and futures you should be fully transparent by law!
Unfortunately it retains the word “Confidential” in the name. So the international media, in their relentlessly bovine way, will simply continue to say that Cayman is a secrecy jurisdiction.
Plus cà change………..
The law was misunderstood. It was introduced to help sell Cayman business to money launderers and over time people became confused and thought it existed for legitimate reasons.
Two things:
1) In the UK, when the penalty for doing something in the business/professional context is criminal, that effectively means there is no penalty because we don’t go around prosecuting men of business for things done in the course of business unless it’s really an egregious case that requires an example to be made of it. At the same time, a criminal penalty sounds menacing enough to dissuade troublemakers. So it’s the perfect balance. I didn’t say it, my company law professor did. Now we’re just left with a civil claim which requires the owner of the information to sue on the wrongful disclosure of it, advice given in relation to confidential information will now be ‘release it if you like, this guy won’t sue’, and we may see an increase in such suits accordingly. As well as an increase in misuse of confidential information.
2) If we had proper data protection legislation, this entire law could be one Part of that legislation. Then we wouldn’t have any ‘secrecy’ law on the books by whatever name called, and a much better answer to any international criticisms (‘you also have data protection’).
Once again, Cayman gets ‘half smart’ a decade too late.
Data Protection? If the information obtained as evidence derived from an investigation and subsequently presented in the courts as evidence of a potential crime(s) it is no longer confidential information.
Gazetted Laws and Law Enforcement protecting thieves & fraudsters is, in and of itself, a CRIME to the nation’s people; thus, exposing people’s lives and livelihood at risk of damages and harm!
When a person has evidence of wrong doing, the matter should be investigated and the alleged offenders prosecuted.
The criminal/fraudster CAN rightfully protect its (confidential) information, but the revelation of that same information SHALL not protect him/her from prosecution. Just ask Law Enforcement: USDOJ, FBI, CIA, IRS and so on. I trust that the Cayman Islands Legislators realizes the same.
Information available to prosecute people for criminal offenses should NOT be protected under ‘Secrecy Laws’ or ‘Confidentiality Laws’. Justice should be the rule.
If you ask the client for permission to give investigators confidential information, you are effectively “tipping off” the client under the AML and proceeds of crime law, which could end up with a fine and prison time for the employee directly.