Revised Dormant Accounts Law passed

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
initial bill.

 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.

Tax
concessions

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
implications.

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.

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2 COMMENTS

  1. I am not convinced that this recent passing of amendment to the Unclaimed Funds law from 6 years to 7 years is satisfactory and this could have serious repercussions. This is not a change it is simply a distraction from truth and reality.

    I am surprised at the opposition especially Mr. Ezzard Miller in not opposing this so called amendment which is NO AMENDMENT at all!it is a go ahead and same ole same ole determination to do as they please with the people’s money!.
    Changing from 6years to 7 years is NOT AN AMENDMENT!

    Dormant Accounts should be labled as 25 to 30 to 50 years old. Not Seven years, Not 10 years and not even 20 years.

    QUALIFYING REASON:

    PARENTS TAKE ANYWHERE FROM 10 TO 15 sometimes 20 YEARS TO SAVE UP FOR THEIR CHILDREN’S COLLEGE FUND! The offer to have account holders get their money back from government by way of application is nothing short of horse manure!

    THIS IS AN INJUSTICE.

    What will parents tell their children who are now in middle School WHAT HAPPENED TO THEIR COLLEGE FUND WHICH IS NOW 8 YEARS OR 10 YEARS OLD IN A SAVINGS ACCOUNT! They need another six years to save up for a college fund. Everyone is not lucky enough to get a scholarship. There are x-pats with Key Employee status who will lose their savings because their children not elegible for scholarships and will pay higher tuitions for their kids schooled in our local colleges or even abroad? What about the CHILDREN?

    THERE IS A CLEAR SENSE OF OVER AND EXTENDED ANXIETY TO GET HANDS ONTO THESE MONIES THAT BELONG TO ITS HARD WORKING RIGHTFUL OWNERS AND NOT THIS UDP GOVERNMENT.

    To the opposition, I expected you to stand up to this decision. How could you do this to the people of the Cayman Islands.? Don’t you realize what you have done Shall I repeat. IT TAKES L5 YTO 20 YEARS TO SAVE UP FOR CHILDREN’S COLLEGE FUND! and that’s a fact!

    To the PPM you silence and unwillingness to stand up for the well being of the people in this serious matter that will have devastating affects on our society is in my opinion in the eyes of the public you appear to be suffering form a severe case of neutering!

    Mr. Premier, go back and look into this matter again, you are rushing the situation. What’s the race all about to get into these people’s bank accounts?

    You MUST change this law from 7 years to 25 years.

    THIS IS UNSATISFACTORY AND AN INJUSTICE TO THE PEOPLE OF THE CAYMAN ISLANDS.

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  2. Tiger,

    Thanks for explaining this to the people.
    I’m not sure if they realize the serious consequences facing them with this recent law just passed. It will hit them when they realize that their children’s college fund is GONE!

    I am just wondering if we elected men to run this country or did we elect Eunuchs? I agree with you.
    It’s hard to find a man to stand up for what is right, if you examine them all closely you might discover that they have all been neutered!
    I feel very sorry that the cayman Islands has no real strong opposition that will stand up for what is right for the people. They only make noise when it suits their own selfish needs.

    Casandra Miller
    Tampa, Fl

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