Beneficial owner access opens to UK

| 04/07/2017 | 0 Comments

(CNS Business): Legislation came into effect this weekend that will allow UK law enforcement authorities to access details of the beneficial owners of all financial entities registered in the Cayman Islands. Officials said the new technology-based system enhancement to the beneficial ownership regime will allow those with legitimate rights or reasons to have access to do so in a more efficient and timely fashion, with speed being the crucial point. The information is not in a central public register but a platform that allows direct access to the RCIPS Financial Crimes Unit so they can respond to requests.

Officials from the Ministry of Financial Services and Home Affairs, now headed by Minister Tara Rivers, said a system had been in place for more than 15 years that provided beneficial ownership information to the UK and other countries through legal means, but the new system will increase the speed in which that information is provided.

Although the system falls well short of being a centralised public register, the changes have caused controversy as some people believe it is a step too far when other jurisdictions are not offering the same kind of access.

McKeeva Bush, the new speaker of the House who is now in coalition with the PPM, was vocally opposed to the laws that paved the way for the new regime while he was in opposition, objecting on the grounds that it would put the local offshore sector at risk.

However, the government has insisted that the system is not very different from the process in place for many years but the efficiency improvement satisfies the UK’s demand for immediate access in criminal cases.

“Financial crime is a serious global problem that requires a unified global response,” Rivers said. “As a jurisdiction, the Cayman Islands continues to play a significant role on international regulatory issues and for implementing global practices to fight financial crime; we have been recognised for decades as a strong international partner in combating corruption, money laundering and tax evasion.”

Officials also revealed that three people from the Foreign and Commonwealth Office and the UK National Crime Agency visited Cayman last week ahead of the implementation.

Chief Officer Dax Basdeo said, “In addition to satisfactorily answering their questions about the enhanced speed with which information will be shared, we briefed the UK team on the system’s design, in relation to ensuring that our constitutional matters of privacy and data protection were maintained.”

Government agencies and the financial services industry were involved in the collaboration to design the technology-based system.

Cayman Finance CEO Jude Scott said, “The Cayman Islands is a premier global financial hub, connecting law-abiding users and providers of investment capital and financing around the world, benefitting both developed and developing countries. We play a critical role in the success of the global financial economy.”

He added, “The Cayman Islands Government, the Cayman Islands Monetary Authority and the private sector have worked continuously over many decades with overseas governments to ensure we are a strong partner in combating global financial crime. Cayman stands ready to collaborate as and when needed.”

Officials said the enhanced system provided a secure mechanism for sharing beneficial ownership information on Cayman’s exempt, limited liability, and non-resident companies, and that by August, information on local, small businesses will also be collected. However, only competent authorities — government agencies and people that have been given legal authority and power — would be able to exchange beneficial ownership information.

In Cayman, the beneficial ownership competent authority is the Financial Services minister, who will delegate authority to the Financial Crimes Unit, which will receive requests from UK law enforcement, and General Registry, which will hold the beneficial ownership data as the search platform.

Cayman and the UK agreed in April 2016 to improve the exchange of beneficial ownership information, as outlined in a document called the Exchange of Notes and Technical Protocol. All UK Overseas Territories entered into similar agreements.

Since then, Cayman has passed amended legislation, new regulations and guidance notes for industry in order to provide the legal framework upon which the system was enhanced.

See documentation on beneficial ownership in the CNS Library

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Category: Finance, Financial Services, Law

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