Premier, minister head to London as beneficial ownership deal unravels

The United Kingdom is seeking an agreement with other leading economic powers in western Europe – and elsewhere – that will lead to the automatic exchange of data on company and trust ownership information.

The proposed agreement – should it become the “truly global standard” – will be followed by the Cayman Islands, Premier Alden McLaughlin told lawmakers Thursday.

Mr. McLaughlin said it appears that what Cayman has previously agreed with the U.K., basically a locally regulated system that would provide company ownership information upon request to U.K. law enforcement or tax authorities – filtering those requests through a Cayman Islands government agency – would not meet the standard as proposed.

“The [beneficial ownership] agreement we have with the U.K., the U.K. government is satisfied with,” Mr. McLaughlin said. “But what has transpired is the other European Union countries … are pressing for a new global standard with respect to the automatic exchange of beneficial ownership information.”

The new standard has not yet been developed, Mr. McLaughlin said, but it is at the initiative stage. He said the Cayman government wants to be included in those discussions.

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“There is no question that countries who do not cooperate in this initiative … are likely to wind up on a blacklist,” Mr. McLaughlin said.

Mr. McLaughlin, Financial Services Minister Wayne Panton and George Town MLA Roy McTaggart are traveling to the U.K. for next week’s Anti-Corruption Summit hosted by Prime Minister David Cameron. Mr. McLaughlin said the travel plans required an early departure from the Legislative Assembly meeting that has been going on for the past two weeks, and the postponement of at least two key pieces of local legislation – the Education Bill and the Data Protection Bill.

Representatives of some 40 countries, including the United States, are expected to be at the conference.

Mr. McLaughlin said the larger British Overseas Territories were invited to attend next Thursday’s conference “on the basis that they give a political commitment to be party [to] what is now being termed the global initiative on the automatic exchange of beneficial ownership information.”

The premier said the discussions with the U.K. and Europe are occurring against an “increasingly vitriolic background” in the U.K. parliament and more broadly across the European Union in the aftermath of the Panama Papers scandal.

U.K. Chancellor of the Exchequer George Osborne announced last month that Britain had initiated an agreement with Germany, France, Italy and Spain that would let enforcement agencies from the five countries directly exchange data on company and trust ownership to allow for more effective investigation of financial crime or tax evasion.

Mr. Osborne also wrote to the group of 20 (G-20) nations to urge progress toward a fully global exchange of ownership information that allows “real time” access to tax and law enforcement agencies.

“There would be no ‘filter’ [in providing] the information,” Mr. McLaughlin said. “The discussion has moved well beyond the discussion of a central registry.”

“Britain will work with our major European partners to find out who really owns the secretive shell companies and trusts that have been used as conduits for evading tax, laundering money and benefitting from corruption,” Mr. Osborne said.

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  1. Well I certainly hope that the biggest tax haven of all, the USA, is on the blacklist. Every US state has there own corporate registration laws. Some like Nevafa and Wyoming openly advertise their corporate secrecy laws.
    I understand that they won’t even provide ownership information to their own IRS.

    Meanwhile in nearby Florida you can form a corporations online direct with the state using an entirely fake address and director names. There is no need at all to disclose the shareholders names.

    I know this as a fact as a couple of years ago I was scammed by such a make believe company. I called the Florida Department of State and told them that this company had used a fake address and they said, “We only register the information we are given.” They had no interest in pursuing this further.

    Once you have a fake Florida company all one needs is a stolen or forged driving license to open a Florida bank account