Cayman model may lead way on beneficial ownership

| 07/03/2017 | 2 Comments

(CNS Business): As the technical experts at the financial services ministry continue to work on the systems that will allow UK authorities to access the beneficial ownership details of companies and other financial entities domiciled in Cayman during investigations, the model Cayman is adopting could be followed in many other jurisdictions. The system is not public, it is not a central register and no one other than local authorities will have direct access, but officials here said it satisfies the demands of the UK and the growing global push to provides a system that can help fight crime and tax evasion.

Despite the criticisms that have been aimed at Financial Services Minister Wayne Panton and his team for agreeing to the creation of a centralised access point, the ministry believes that the model Cayman has come up with will not undermine the privacy of clients but will make access for law enforcement more efficient – creating the best of both worlds given the circumstances and the demands being made for much more transparency and accountability across the offshore world.

“We hope the approach we are taking will show that we can share information in an efficient manner,” Panton said Monday at a press meeting about the passage of three pieces of legislation in the Legislative Assembly this week that have paved the way for Cayman to meet the agreement it signed with the UK on the issue of access to beneficial ownership.

Once the UK began pushing for a completely open, public and centralised register to deal with the growing global concerns surrounding how shell companies hide who really owns them to either dodge tax or commit crime, the financial services ministry pushed back with an alternative that keeps the information private.

Having formulated a process that uses the records that financial service companies are already obligated to retain, the goal now it to fine-tune the technology that will allow the RCIPS to conduct a search if requested to do so by the agreed authorities in the UK to find specific information relating to an inquiry.

“This is a platform that allows access to information based on a specific detailed request,” Panton said as he explained the limited but clear access for British law enforcement and tax agencies only.

“We suspect it will be a model that our overseas territory colleagues are looking to implement and others might consider the same approach,” Panton explained. “Jurisdictions are going through their assessments and the problem they face is problems accessing accurate and timely information. But we are the gold standard in beneficial ownership information.”

Because Cayman companies have been storing the information for more than 15 years to meet the requirements of the anti-money laundering and terrorist financing agreements with the local financial services industry, the data is already there. The only thing the government must do is find a secure technical platform to allow the precise and necessary searches for information that does not undermine the privacy of anyone else and does not alert the people or entities that are being investigated to the search.

The ministry is confident that it will have the secure technology completed and ready for use before the June deadline agreed with the UK and demonstrate to the world that the jurisdiction continues to be part of the solution when it comes to the fight against financial crime and not, as many still believe, a facilitator.

See CIGTV coverage of the passage of the beneficial ownership legislation below.

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  1. Anonymous says:

    The point is that there is to be a register of beneficial ownership which will list that info.

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  2. Anonymous says:

    What's the point? Majority of companies are nominee owned anyway. They get access to the shareholder register and then request the info from the corporate entity?

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