Premier right to reject suggestions to make beneficial ownership registers public

Dear editor,

The Premier, the Hon. André Ebanks, is right in principle, and legally, to reject further suggestions that beneficial ownership registers in the Cayman Islands be available to the public at large. Unrestricted public access is not a global standard, and has been rejected by the European Court of Justice in the EU in Sovim on the basis of identical wording to that in the Cayman Islands Bill of Rights. It is most certainly not a standard in China or Southeast Asia and nor is it in the United States where the Corporate Transparency Act has been suspended. Furthermore, it is not a requirement of any FATF Directive, nor, notwithstanding the EU 6th Anti-Money Laundering Directive has it been and nor is it ever likely to be adopted universally in the EU. It is perhaps regrettable that further thought was not given to how exactly inserting the word ‘legitimate’ as a prefix to ‘interest’ is supposed to confer legitimacy on enquiring journalists but, as the Premier now rightly, says, enough is enough.

The demands appear to be driven by two virtue signaling UK politicians, Dame Margaret Hodge and Andrew Mitchell, whose hypocritical premise is that this is a world leading and effective UK initiative, a laughable proposition given the pervasive disinformation available from that three-ring unregulated circus known as UK Companies House. No coherent argument as to how or why tax evasion or law enforcement would be enhanced here by public access has ever been put forward by Hodge or Mitchell who shamelessly ignore the fact that documented and verified Cayman Islands beneficial ownership information is available to law enforcement and tax authorities on 24 hours’ notice. In a civilized society, the policy should be that privacy yields to enquiry by law or regulatory authorities only. And, nor, notably, is it the case that with such unrestricted access any statistically relevant tax evasion or money laundering convictions in relation to Cayman Islands structures have materialised. The Hodge/Mitchell charade should be dismissed for what it transparently is. An attempt to deflect attention from the UK which, as with other onshore jurisdictions which do not apply Cayman Islands standards of diligence, is a hot mess of money laundering placement with billions of dollars of the proceeds of crime routinely invested.

This point is highly material to the upcoming FATF evaluation about which there is altogether too much ill-founded concern. When the FCO first visited the Cayman Islands in mid-1990s, the Private Sector Consultant Committee were told that there was some US$2 trillion of criminal proceeds globally in circulation annually. Notwithstanding the hundreds of billions of dollars (possibly a good deal more) expended in applying called Anti-Money Laundering legislation and the unreasonable and costly burdens placed on the Cayman Islands financial services industry in consequence, in 2025, this figure had risen to US$5.5 trillion with less than 1% being interdicted notwithstanding the hundreds of thousands of filed annual suspicious activity reports. On any real-world analysis, it is the case that the FATF system imposed is a complete and abject failure.

But it is worse than that. More perniciously, what the FATF have succeeded in doing is to reverse the burden of evidence which should be paramount in any common law jurisdiction. The group think which has apparently become normalised amongst otherwise sensible individuals is that the absence of fines or regulatory enforcement by the Cayman Islands authorities is to be taken as evidence that money laundering is prevalent. The truth of the matter is quite the reverse. In the last two decades, virtually every single major money laundering case has occurred in an onshore money center bank where criminal proceeds were deposited in cash through corrupt or delinquent employees. The FATF have wandered off tangentially and are a long way from the correct understanding. In a jurisdiction like the Cayman Islands in which cash deposits are de minimis and which has a best of class transparent regulatory system, the absence of regulatory fines and enforcement should be regarded as irrefutable evidence of the absence of money laundering and not as a justification for more meaningless and ineffective regulation. In the interests of the long-term viability of the Cayman Islands financial services industry, we need not more compliance and regulation but an urgent reality check together with a better understanding of the not so thinly hidden FATF agenda.

Anthony Travers