Fighting off last-minute overtures from the United Kingdom on the implementation of a public, centralized beneficial ownership registry for locally registered businesses and potentially trusts, Cayman Islands Premier Alden McLaughlin said Monday that the British Overseas Territories are standing united against such a move.
“Unless such registers become the new global standard…neither we, nor any other overseas territory or Crown dependency intend to go first and intend to have our economic experimented with and potentially damaged,” Premier McLaughlin told the Legislative Assembly.
In late 2013, U.K. Prime Minister David Cameron announced plans to create a publicly accessible central registry of information on beneficial ownership in the U.K. and called on other countries to follow suit. Former Overseas Territories Minister Mark Simmonds said during a visit to the Cayman Islands last year that such a move would ultimately be a local decision.
In March, the European Parliament approved a recommendation from two of its committees to enact legislation that would create public registers listing online the beneficial owners of all European Union companies and trusts. The recommendations go further than what was proposed by the EU Commission and the U.K. government by including the beneficial owners of trusts.
Cayman already has legislation requiring the maintenance of a beneficial ownership registration for entities, but that register is not public and court action is often necessary in order to retrieve it.
Premier McLaughlin said there were attempts by U.K. officials during the end of the annual Joint Ministerial Council meetings in London last week to get the overseas territories to agree to introduce a central register of companies and to “work toward the possibility of making this public in the future.”
Mr. McLaughlin said he and Financial Services Minister Wayne Panton are in agreement with the 10 principles of beneficial ownership as agreed at the Brisbane G-20 summit earlier this year. Among those principles are requirements that “countries should ensure that competent authorities, including law enforcement and prosecutorial authorities, supervisory authorities, tax authorities and financial intelligence units have timely access to adequate, accurate and current information regarding the beneficial ownership of legal persons.”
“Our systems do this now,” Mr. McLaughlin said. “We see no need for a central registry that would increase costs to business and the country and also create a potential single data source which motivated and skilled individuals would hack into for gain.
“None of the G-20 principles speak to a public registry at all. I suspect this is for a good reason, because it is a bad idea. None of the G-20, other than the U.K. will likely implement it, and neither will the Cayman Islands.”
Minister Panton has maintained that Cayman will adhere to international standards, provided there is a “level playing field.”
Mr. Panton and other members of Cayman’s financial services industry met with U.K. officials in June to discuss the beneficial ownership issue, but Mr. Panton said he doubted it would alter the U.K.’s agenda. “It would be very optimistic to think they would be satisfied and leave us alone on this particular issue,” he said.
Cayman Islands Chamber of Commerce President Johann Moxam said Monday that he also expected the international “pressure” on the beneficial ownership issues to remain for some time, but said the Chamber congratulated Mr. McLaughlin and Mr. Panton’s government on their stance.
“We support the government’s position holding the line by not acquiescing to requests for the implementation of a public beneficial ownership registry, which would negatively impact the Cayman Islands and put our jurisdiction at a competitive disadvantage, particularly when none of our competitors or the big countries, the U.K., the U.S. and Canada have committed to such course of action and legislation,” Mr. Moxam said.
“This is a step in the right direction and we are grateful that the government has the strength to hold the line and protect the best interests of the Cayman Islands.”
“Although this discussion will continue and international pressure will remain for some time, the government is to be congratulated.”