Beneficial ownership law begins amid public access push

As Cayman’s new Beneficial Ownership Transparency Act and accompanying regulations officially commence, the push to have this information made publicly accessible continues.

In the UK, transparency groups have continued to press that public registers be implemented in overseas territories regarding the people who own and control business entities; and the new Labour-led administration has signalled its intent to have this happen sooner rather than later.

The new law, which was passed in November, allows access to beneficial ownership information as part of anti-money laundering and counter-terrorist financing investigations but stops short of allowing access to the public.

Governor Jane Owen, in a recent interview with the Cayman Compass, said that UK Foreign Secretary David Lammy has already spoken “quite a bit about having an effort against what he calls kleptocracy”.

Discussions continue

In explaining Lammy’s position, Owen said, his thinking is about how governments around the world are “ensuring that the monies they are getting are properly [and] transparently accounted for and properly invested”.

She pointed out that in various different jurisdictions around the world, there have been complaints that corrupt leaders have “squirreled away the money and spent it on him or herself rather than on the people” and “with a lot of money from around the globe coming to Cayman, we need to be able to demonstrate that it’s well regulated”.

Owen indicated that Cayman has already demonstrated this with “extremely competent regulators” like the Monetary Authority and the Financial Reporting Authority.

“We have very strong regulation and that is why we were taken off the ‘grey list’ of the FATF in the autumn. So I think we’re in a really strong position. Now beneficial ownership is an important part of this. We have already a very effective register and it is accessed by law enforcement and also by some commercial entities,” she said.

Expanding access being reviewed

Owen said the push now around the globe is to enable this data to also be accessed when it’s appropriate by other individuals such as journalists or academics.

Owen said Cayman is thinking how to do that in an effective way, following the passage and now enactment of the current act.

“We are now thinking about how we kind of go the next step to think about greater access within the right framework parameters. So that will continue to be a discussion that we have, and we have been talking to industry about that as well,” she said, adding that Deputy Premier André Ebanks is leading that discussion.

The previous Tory-led UK administration had published a draft Order in Council in December 2020, alongside a statement on progress on the implementation of beneficial ownership registers in the territories, as well as public registers.

The deadline for enforcing the order was initially dated until the end of 2023, but that was extended as discussions with the territories continued.

Owen said she does not think that the discussions have reached the stage of enforcing the Order in Council.

“Certainly the stage we’re at at the moment is working together frankly with Cayman’s leadership position really to figure out how this can best be done in a way that suits everybody but that does provide that reassurance that access can be given when it’s justified,” she said.

The Financial Services Ministry, in its statement on the Beneficial Ownership Transparency Act, said, “the legislation also aligns with enhanced Recommendation 24 of the Financial Action Task Force (FATF) global standard, ensuring that competent authorities locally and globally have access to adequate, accurate and current information on beneficial owners of companies”.

Stakeholders, it said, have responded positively overall to the act, regulations and guidance, “as a result of the Ministry’s extensive consultation with industry, the public, government partners and international entities over the past three years”.

It has said that it is asking industry members to suspend filing beneficial ownership information under the previous framework until the ministry notifies them to recommence filing under the new framework.

Enforcement relating to the new requirements in the framework will be suspended until early next year.

In addition to the act and regulations, guidance on complying with beneficial ownership obligations is available on the General Registry’s website.