The Cayman Islands will not adopt a public central register of beneficial owners of companies and other entities, the government confirmed December 30, in a report following a consultation on the matter. The government did commit to improving its current system of providing beneficial ownership information to law enforcement, tax, and regulatory authorities, though.
“Until such time as there is global agreement on appropriate exemptions and safeguards [for a central public register], and this becomes the internationally practiced standard, the Cayman Islands will continue to follow its [current] regime,” the government said in its report.
The decision came as no surprise as Cayman Islands Premier Alden McLaughlin told local press December 9 that the British Overseas Territories were united against adopting a central public register, calling such a move an experiment that could damage their economies. UK Prime Minister David Cameron had urged the Territories, including the Cayman Islands, to set up central public registries, after announcing in October 2013 that the UK intended to do so.
Currently, information on who owns Cayman Islands companies is collected and held by licensed and regulated corporate service providers (CSPs) and is not made public. According to the Cayman government, the CSP regime adheres to the Financial Action Task Force (FATF) recommendations. It also said that 81 percent of respondents to its consultation did not favor a central registry or public access to a registry.
To further strengthen Cayman’s existing framework, the government said it would enact legislation that would require CSPs to produce beneficial ownership information to tax, regulatory, and law enforcement authorities within a target turnaround time of 24 hours. It also said it would codify definitions of “beneficial owner” and “control” and would amend Cayman Islands Companies laws to abolish bearer shares.
Further, the government said it would require an annual filing of legal ownership information of Cayman Islands exempted companies with the General Registry of the Cayman Islands by corresponding CSPs with appropriate exemptions, such as for publicly listed or regulated companies.
It will also require CSPs to designate a natural person locally to be accountable to Cayman Islands authorities for the availability of ownership information and the monitoring/testing thereof at specified intervals. New legislation will also empower the government to wind up entities that do not comply with legal or beneficial ownership requirements, the government said.
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