Just under half of Cayman’s 546 non-profit organisations have failed to file annual returns, Head of Compliance Paul Inniss at the General Registry said.
Inniss, responding to queries from the Cayman Compass, said, “Under the NPO law, entities are required to file within six months after the financial year ends. To date, more than 50% of the sector has filed an annual return.”
Last month, he issued a notice of non-compliance to St. Ignatius Catholic Church and School for failure to submit an annual return report.
Inniss, who is also the registrar of NPOs, said he is currently undertaking several investigations related to non-compliance, but declined to share the number of entities that are being investigated.
“As you would imagine, it would not be appropriate to provide details on active investigations,” he said.
Cayman’s Non-Profit Organisation Law came into effect in 2017. Inniss said that, back then, it was estimated there were more than 300 NPOs in Cayman, but now 546 are registered.
“To assist entities in determining the need to register, more than 130 education sessions were held. Registration guidelines, and updated registration statistics, are also available on www.ciregistry.ky, and the NPO Registrar is available to answer questions,” he said in an emailed response.
Inniss said checks are done during the registration process, which included carrying out risk assessment and verifying the reputation of the individuals who manage the NPOs.
He said a team, comprising members of both the compliance and corporate units, has day-to-day operational responsibility for supervising the NPO sector.
Inniss said he believes the team is meeting the international Financial Action Task Force mandate to supervise the NPO sector, “as the FATF has recognised the global risk of NPOs potentially being used for activities such as terrorist financing”.
He said Cayman’s NPO risk assessment in 2019 determined local risk of NPOs being misused is low, “but having the standard in place assists in keeping the risk low”.
Under the law, NPOs face a $500 penalty for non-compliance, plus $10 for every day beyond 1 Aug. 2018, that they fail to apply for registration, up to a maximum fine of $3,000.
NPOs that fail to submit annual returns are liable to a maximum penalty of $3,000 and, in the case of a continuing breach, to a further penalty not exceeding $100 for every day or part thereof during which the breach continues after the determination by the registrar.