A legislative mishap has imperiled the enactment of a law regulating nonprofit organizations in the Cayman Islands, legislation considered necessary as the government prepares for an international review of its money laundering and terrorist financing protections later this year.
In short, it appears lawmakers approved an incorrect, outdated version of the Non-Profit Organisations Bill, 2016, during a Legislative Assembly meeting last fall.
Governor Helen Kilpatrick has since written to the Speaker of the House, asking that the legislation be put back in for review during the assembly’s committee stages, so the correct changes can be made and the correct law be enacted.
East End MLA Arden McLean indicated he was concerned about the process lawmakers were attempting in order to pass the correct version of the bill: “I don’t know what’s wrong with the bill.”
Attorney General Sam Bulgin explained that while lawmakers had apparently voted through the correct version of the Non-Profit Organisations Bill on second reading in October, that version of the bill was inexplicably replaced by an older version of the legislation when lawmakers reviewed it during the committee stages. The older version of the law was approved in a third vote of the assembly later in the meeting.
Mr. Bulgin said legislative drafters later noticed that several key changes, including a schedule attached to the bill, were not included in what was ultimately approved by the assembly.
He said the governor recommended that those changes be made in committee of the current legislative meeting.
The Legislative Assembly has only seven more working days before the House is dissolved ahead of the May general election.
The proposal, which started as the Charities Bill in 2010, seeks to deal with the monitoring of nonprofits through audits and the regulation of those organizations via government registration.
The legislation currently defines a nonprofit as any organization seeking public contributions as its primary purpose for philanthropic activities. The bill does not apply to charitable or voluntary organizations that are already regulated by a government entity, trusts that are registered under the Banks and Trust Companies Law and any other entities that are exempt through an order of Cabinet. Entities with gross annual revenues of at least $250,000 that remit at least 30 percent of those earnings overseas must have their financial statements reviewed by an accountant and report the results to government. Those that receive under $250,000 per year may still be reviewed on a case-by-case basis.
Successive government administrations have been under pressure to pass a law regulating charitable contributions, which have been used in other countries as covers for entities that try to support money laundering or terrorism financing. Cayman is facing a mid-2017 review by the Caribbean Financial Action Task Force that will evaluate its preventive measures in those areas.