Significant changes in new bill
The Cayman Islands
Legislative Assembly Monday unanimously passed changes to a law that allows
government to seize the dormant local bank accounts of individuals or companies
who have not used those facilities within the past seven years.
The Dormant Accounts
(Amendment) Bill, 2010, is actually the revised version of a law that was passed
back in July. Changes to the legislation were made quickly after
representatives of the international finance industry cried foul over the
A number of amendments will be made as a result of the bill’s passage.
The new Dormant Accounts (Amendment) Bill, 2010, extends the dormancy period created by the original law from six years to seven years.
The changes also eliminate all references from the previous law to financial institutions and instead refer to the entities that hold dormant accounts as ‘account providers’. Under the amendment, account providers include: class A insurers, banks, some licensed trust companies, credit unions, building societies, or any other type of financial institution that Cayman Islands Cabinet members determine to be an account provider. Cabinet members can make that designation in any case where it is deemed to be in the national interest to do so.
The notification period for the dormant account holders – other than the extension of the dormancy period to seven years – has remained the same under the Dormant Accounts (Amendment) Bill. Account providers must take certain steps to contact holders of dormant accounts by 31 July of the year that account has reached the seven-year threshold.
If no account activity is noted, or if no attempt to contact the account provider is made by 31 December of that year, the funds can be transferred to government by 31 March of the following year. The law absolves the account provider of any liability for the funds once they are transferred to government. However, there is a process whereby account holders can get their money back from government.
Locally operating banks
already published their own lists of dormant accounts earlier this year, but
most did not identify the account holders or the amount held in each account.
Final passage of the Tax
Concessions (Amendment) Bill – which would allow the ruling Cabinet to expand
the number and type of companies who are offered tax breaks in return for
investing in Cayman – was delayed by an issue which could have Constitutional
Lawmakers spent most of
Monday’s abbreviated morning session arguing over the legal definition of the
word ‘governor’ as contained in the amendment bill.
Typically, in modern
Cayman Islands laws the use of the word
‘governor’ implies ‘governor in Cabinet’. Any powers ascribed to the ‘governor’
in a law would go to the Cabinet, meaning all elected and appointed officials
who sit on that body.
In this particular case,
independent legislator Ezzard Miller and opposition party lawmakers were keen to
see any concession making powers in the bill given to Cabinet members
specifically, separate and apart from the governor.
In fact, Mr. Miller
opined that the definition of ‘governor’ as ‘governor in Cabinet’ had
fundamentally changed since the implementation of Cayman’s 2009 Constitution.
‘Everyone just assumed it
should continue,” Mr. Miller said.
Speaker of the House Mary
Lawrence asked Attorney General Sam Bulgin to research the matter and report
back to the house Thursday. Mr. Bulgin said he would look into the issue, but
noted he was “not convinced” that the Tax Concessions Law or any other would
have to be changed.