Non-profit Legislation rules come into effect

Two pieces of legislation that clarify Cayman’s regime for non-profit organisations will come into force on April 1. The Non-Profit Organisations (Amendment) Law, 2018 (Commencement) Order, 2019 and Non-Profit Organisations (Registration Application) (Amendment) Regulations, 2019 were gazetted on March 13.

The regulations facilitate the enactment of the NPO (Amendment) Law, 2018.

This law defines the organisations that are in the scope of the law, and those that are exempt; provide the registrar of non-profit organisations with the power to periodically assess Cayman’s non-profit sector to identify any potential jurisdictional vulnerabilities to terrorist financing activities; and allow for expedited processing of applications. The amendment to the NPO regulations also reduces fees for filing changes.

These pieces of legislation supplement the legal framework created by the Non-Profit Organisations Law, 2017, which required the General Registry to obtain the necessary personnel and electronic resources to process applications and identify and understand the risks of non-profits, especially with regard to money laundering and terrorist financing.

The Caribbean Financial Action Task Force assessment of Cayman’s regime to counter money laundering and terrorist financing, released last week, found that the registrar should have the power to periodically assess the non-profit sector to identify jurisdictional vulnerabilities to terrorist financing activities. The amendments to the legislation now allow the registrar to collect the necessary information and make regular assessments.

The amended law also limits the information maintained by the registrar that is publicly available but contains mechanisms through which the registrar can share information with other authorities.

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