UK legislation not ‘death knell’ for Cayman business

The head of Cayman’s primary financial services industry representative group said Wednesday that a move to force public registers of company ownership upon British Overseas Territories by December 2020 will not have any immediate “significant impact” on international business conducted in the jurisdiction.

Cayman Finance Chief Executive Officer Jude Scott did warn that Cayman needed to “use its time wisely” over the next two and a half years to convince both the U.K. and international business partners that Cayman’s current company register actually sets the industry standard, exceeding the anti-money laundering protections used by most larger countries.

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The U.K. parliament has set a Dec. 31, 2020 deadline for the implementation of public company ownership registries in the 14 overseas territories, but not the three U.K. Crown Dependencies. If that deadline is not met, an amendment to the U.K. Sanctions and Anti-Money Laundering Bill approved May 1 in the House of Commons requires the British secretary of state to draft orders in council to force the creation of a public register in each of the territories.

Mr. Scott said, even if that step – which Cayman would legally challenge – ends up being taken, Cayman’s financial services business will survive.

“We take a step back and we look at the quality of the clients that we have in the jurisdiction,” Mr. Scott said during a Wednesday press conference. “These are top-quality clients. If, tomorrow, central public registers were a global standard, they would have no issue with it.”

Mr. Scott said he believed Cayman still needs more discussions with U.K. lawmakers, who may not understand Cayman’s business model or what it does in the global financial services industry.

“[The open public register of company owners] is merely one of the things that has been pushed by certain non-governmental organizations that [is] intended to create disadvantages or discrimination [against] small jurisdictions like ourselves,” Mr. Scott said. “While in large jurisdictions, quite likely, that will never ever be an international standard that they would ever follow.”

This sentiment was echoed by both Premier Alden McLaughlin and Bodden Town West MLA Chris Saunders. Mr. Saunders, a member of Cayman’s political opposition and a banker by trade, noted opposition group members are “not fundamentally opposed” to a public company register, although the group has “our doubts about its usefulness.”

“Rather, we are concerned about the advantage that it would give our competitors at a time when no other country, including the U.K. Crown Dependencies [Guernsey, Jersey and Isle of Man], are required to institute a public registry,” Mr. Saunders said.

Mr. McLaughlin agreed with Mr. Scott about the impacts of the May 1 vote.

“The fact that the U.K. has threatened, and it doesn’t rise beyond a level of a threat, to impose public registers on the Cayman Islands some years hence … I don’t think it is enough to scare business away from the Cayman Islands,” the premier said.

The premier said he still opposes the creation of a public company ownership registry on privacy grounds, noting that any number of locally operating companies with no ties to the international financial services industry would be caught up in the requirements.

“People always seem to conflate secrecy and privacy,” he said. “Pray tell me why all and sundry should know who the beneficial owner of Foster’s Food Fair is?

“The greater threat is … if it is perceived internationally that the U.K. parliament can, on a whim, decide to change local legislation, then we really have something to worry about. That will truly scare businesses.”

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  1. This law is in conflict with our constitution guarantee of privacy.

    However this was an Act of Parliament. It cannot be set aside by the UK Supreme Court. It would need to be repealed in the UK.

    But how exactly could the UK enforce it if we refuse to comply? The current local legislation requiring a central register by the end of June (next month) needs to be delayed because such a register only facilitates this outrageous usurpation of our RIGHTS to set our local laws.

    Let me be clear. I am opposed any use of our country by drug dealers and corrupt overseas rulers. But the tax authorities overseas already have the right to request information.

    But NOTHING good is achieved by allowing Russian hackers and identity thieves access to information that remains PRIVATE in EVERY country in the world except for the UK.