Premier: ‘Beneficial ownership’ agreement finalized with UK

Premier Alden McLaughlin, left, and Ministry of Financial Services Chief Officer Dax Basdeo announce a beneficial ownership agreement with the United Kingdom at a press conference Monday.

The Cayman Islands government and the United Kingdom announced Monday a new agreement on accessing company ownership information, that has been in the works since 2013.

The agreement, announced in Cayman by Premier Alden McLaughlin just minutes after U.K. Prime Minister David Cameron spoke of the deal in the House of Commons, lays out the details for the new centralized system for Cayman officials to access beneficial ownership information.

The agreement gives Cayman until July 2017 to get the system up and running. The system, the premier said, will give the Ministry of Financial Services access to the data in the corporate services companies’ databases without the target companies or the service providers knowing.

The premier, speaking at a press conference Monday morning, said, “These negotiations, and indeed the entire process, which began in 2013 has been difficult and complex, but again, it’s the outcome that’s important: The U.K. has recognized that our system of enhancements meets their criteria for the sharing of information; meets global standards; and is best for this jurisdiction.”

The deal does not include a public registry, nor does it create a central government-maintained registry. The new system gives Cayman officials access to databases held by the financial services companies. Under the new regime, foreign law enforcement and tax agencies will be able to ask Cayman authorities to gather the information from the system. Companies will not know when law enforcement agencies request a search of the databases or what they are searching for.

“It certainly will not be available publicly or available directly by any U.K. or non-Cayman Islands agency,” the premier said.

The system will allow law enforcement agencies from other countries to request information on money laundering, tax avoidance and other investigations.

“We don’t want business which is tainted,” the premier said. “If there is bad business here, they would be well advised to migrate somewhere else.”

Speaking Monday in the House of Commons, Prime Minister Cameron said, “The House should note that that will place our overseas territories and Crown dependencies well ahead of many other similar jurisdictions, and also – crucially – ahead of many of our major international partners, including some states in the United States of America.”

A working group set up by the Ministry of Financial Services and Cayman Finance has been studying the new system and, according to ministry chief officer Dax Basdeo, the group should have a final report on the legal and technical requirements of the new system in the next couple of weeks.

“We are going to need to make a number of changes to a range of legislation,” Mr. Basdeo said, including the Companies Law. He said once the working group finishes debating the potential legislative changes and delivers its report, the amendments will have to go to consultation and then to Cabinet.

The premier said the Confidential Relationships (Preservation) Law could be replaced with new data protection legislation.

“We are hopeful that this will all be done by September of this year,” he said, so the ministry and its partners can focus on the technical side and get the full system online by the July 2017 deadline.

Mr. McLaughlin said the technical details had been reviewed and it is possible to develop software that would give ministry officials access to the private databases of the corporate service providers and access to beneficial ownership information.


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