Cayman commits to public beneficial ownership register

The Cayman Islands will make the true owners of companies incorporated in the islands public as soon as European Union countries establish their own public registers. Corresponding legislation is expected to be introduced in 2022.

The government on Tuesday announced its intention to introduce a public register of beneficial ownership, in line with evolving standards and international obligations such as those reflected by the principles of the EU’s 5th Anti-Money Laundering Directive.

The government had previously said it would only make this type of information public if it became an international standard. The change of stance follows a similar announcement made by the British Crown Dependencies earlier this year.

In a statement, the government said its commitment to introduce public beneficial ownership registers on a timeline that mirrors their introduction in the EU as well as the reform of the existing public register in the UK, “confirms our ongoing commitment to meeting international standards and to adapting proactively as global best practice evolves”.

Premier Alden McLaughlin said the introduction of the UK’s public beneficial ownership register, the EU 5th AMLD and similar actions by other jurisdictions represented a shift in the global standard and the practices used to combat illicit activity.

- Advertisement -

“I am proud that the Cayman Islands has worked so well with law enforcement and tax authorities the world over, and that the level of transparency of our regime has been recognised by key international bodies and other governments,” the premier said.

“The timeline we have announced today recognises the work necessary to create a register that is sufficiently robust, capable of suitable levels of interoperability and that will avoid the redesigns that the UK now has to undertake.”

The UK announced plans in May to reform its register of persons with significant control (PSC). After a number of high-profile money laundering and fraud scandals involved UK companies and partnerships, Companies House will be given more power to check the identities of people who set up businesses.

A public consultation launched by the UK government also aims to give directors more control over their personal information to fight widespread identity theft. These reforms are understood to take at least two years.

Timeline to introduce public registers

Cayman’s beneficial ownership strategy entails a series of steps before registers can be made public.

This includes enhancements to the existing centralised register and, if necessary, the development of a new system to ensure efficient data access and management.

The government will then work with the UK, the EU and other jurisdictions on the interconnection of national beneficial ownership registers for law enforcement purposes.

In a next step, the register will be made available for certain businesses to carry out corporate due diligence.

The beneficial ownership register will be opened to public access, when public registers are established under international standards, for example in the EU under the 5th Anti-Money Laundering Directive.

Government said the harmonisation of methods to collect and maintain beneficial ownership information will likely result in changes to how the steps of its strategy are carried out.

“To this extent, the Cayman Islands expects to adapt its strategy depending on the results of the EU’s Implementation Review of the 5th AMLD in January 2022 and the results of the reforms that are underway with the UK’s Persons of Significant Control register,” a government strategy paper said.

The necessary legislative changes are therefore expected to be proposed in 2022.

Minister for Financial Services Tara Rivers said the beneficial ownership plans would reinforce Cayman’s standing as a leading financial centre. She encouraged other countries to commit to the introduction of public beneficial ownership registers.

“It is appropriate that other jurisdictions with developed financial services industries follow suit, and we will make every effort to support the global development and implementation of evolving international standards in this area,” she said. “We stand ready to work collaboratively with other jurisdictions as a common approach emerges in the design and maintenance of verified beneficial ownership registers.”

Financial services providers in Cayman have collected verified beneficial ownership information for more than 15 years. The information is shared with law enforcement and tax authorities in more than 100 countries worldwide, including the UK, the EU and the G-20.

- Advertisement -

Support local journalism. Subscribe to the all-access pass for the Cayman Compass.

Subscribe now