UK minister: 'More than one way' on beneficial ownership

UK minister:

Acting U.K. Overseas Territories Minister Grant Shapps said Thursday he is hopeful that Cayman and the Mother Country can reach some form of agreement on requirements to list the beneficial owners of companies registered here. 

“There’s more than one way to skin a cat,” Mr. Shapps said during a brief press conference just prior to his departure from the Cayman Islands Thursday afternoon. 

“The principle [of a beneficial ownership registry] is really straightforward,” he said. “There needs to be the ability, particularly for law enforcement … to find out who owns what in a quick and transparent way. On that basis [the U.K. and Cayman] are entirely agreed.” 

The difficulty has come with U.K. requirements that Cayman, and other overseas territories, establish a “central registry” – potentially making that registry public – where company ownership information can be accessed. Premier Alden McLaughlin has said many times that the Cayman Islands public and private sectors are opposed to such a plan. 

Mr. McLaughlin said Thursday that it appeared the U.K. had “moved its position” on demands for a central ownership registry and would accept “another effective mechanism” for releasing that information. 

The issue will be discussed further at the Joint Ministerial Council meeting set for November in London, Mr. Shapps said. 

The implementation of a centralized, public register has been advocated by the U.K. government and the European Union to increase transparency around the true owners of shell companies and trusts, particularly in cases where those companies have been accused of criminal wrongdoing. 

Cayman Finance Chairman Jude Scott said his organization, which represents Cayman’s financial services industry, agrees with government’s position that no change is necessary to Cayman’s already effective beneficial ownership system. 

Some international authorities have recently recognized Cayman’s system of identifying beneficial owners of registered companies as far better than their own, including the United States, which has no central federalized register and largely depends on state governments for such information. 

New York County District Attorney Cyrus Vance was called before the U.S. House Task Force to Investigate Terrorism Financing to discuss this same issue. 

“On a near daily basis, we encounter a company or network of companies involved in suspicious activity, but we are unable to glean who is actually controlling and benefiting from those entities, and from their illicit activity,” Mr. Vance said. “In other words, we can’t identify the criminal. 

“This is not because the entities are incorporated in an offshore tax haven like the Cayman Islands. That country actually collects beneficial ownership information. Often, that entity is incorporated in the United States – and it’s incorporated in the U.S. precisely because we don’t collect beneficial owner information. In this important way, the prosecutor sitting in the Cayman Islands is better positioned to root out terrorism finance in her own markets than I am in ours.” 

Cayman Islands Financial Services Minister Wayne Panton has supported strengthening the islands’ beneficial ownership registry information, but has opposed its general release to the public. 

U.K. Prime Minister David Cameron has urged all British Overseas Territories to adopt a public beneficial ownership registry, but U.K. government officials have indicated any final decisions are to be left to the territories themselves. 

Premier Alden McLaughlin, Acting Overseas Territories Minister Grant Shapps and Governor Helen Kilpatrick field media questions Thursday at the Government Administration Building.

Premier Alden McLaughlin, Acting Overseas Territories Minister Grant Shapps and Governor Helen Kilpatrick field media questions Thursday at the Government Administration Building. – Photo: Brent Fuller

Premier Alden McLaughlin and Acting U.K. Overseas Territories Minister Grant Shapps speak to the press Thursday. - Photo: Brent Fuller

Premier Alden McLaughlin and Acting U.K. Overseas Territories Minister Grant Shapps speak to the press Thursday. – Photo: Brent Fuller
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  1. Very simple answer.
    When the USA requires its states to have such a public register of beneficial owners, including Delaware and Nevada, then so will the Cayman islands.

    Until then the information should only be given to legitimate law enforcement officers investigating a crime. Preferably something that would be criminal in the Cayman Islands.

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  2. Mr Linton, your summary seems fair, even if we can only pretend that we have the power to insist!
    One small point though, you suggest that the criminal act under investigation should be considered a crime in the Cayman Islands. This is more difficult than it appears, because traditionally, some Cayman finance practitioners claim tax avoidance is not a crime in Cayman, because we have no tax! Nevertheless it is a form of fraud, and that is a crime everywhere, so those that hope that is our let out will be disappointed!

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  3. Arthur.
    There are many laws in many countries.
    For example it is illegal in Saudi Arabia for a woman to drive a car.
    It is illegal for an American to drink alcohol under the age of 21.
    A homosexual can marry in many US states but can be stoned to death in Iran.
    It is legal to own a firearm in the USA but not in the Cayman Islands.

    How can we possibly be responsible for enforcing every law of every country? Many of which are at odds with each other.

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  4. Norman, the crimes you have cited might be dealt with by extradition if we harboured the criminal, however, that isn’t relevant where company ownership and release of information is concerned!
    Like it or not, if we continue to help residents of another country to evade their taxes, then we can expect to be the subject of their attention!

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