A lesson in semantics
The announcements coming out from both the CI government and the UK government on beneficial ownership can provide a lesson in semantics.
The arguments are seemingly centered on the meanings of the words “public” versus “centralised.”
The “simple definition” of semantics from the Merriam-Webster Dictionary is “the study of the meanings of words and phrases in language” or “the meanings of words and phrases in a particular context.”
The “full definition” of semantics from the Merriam-Webster Dictionary also includes this: “the language used (as in advertising or political propaganda) to achieve a desired effect on an audience especially through the use of words with novel or dual meanings.”
This expanded meaning is what we are referring to in the various phrases and terminology being thrown around with regard to the sharing and publication of beneficial ownership information.
Somehow, it seems to be that our leaders are telling us that while they have agreed to a “centralised” register, this is not a “public” register so it is a victory of sorts for the Cayman Islands.
The concept of the “centralised” platform versus a “public register” follows Premier Hon Alden McLaughlin and Financial Services Minister Hon Wayne Panton’s attendance at the Joint Ministerial Council meeting (JMC) in London earlier this month, at which the UK exerted pressure on its Overseas Territories to agree to create a central public register of beneficial owners.
The UK’s idea of a central public register entails having companies provide, through an honour system, data relating to beneficial owners – those who are direct or indirect owners of companies. The data collected will be compiled and held in a central register which would be open to the public. Beneficial ownership information is one the critical issues that tax and law enforcement agencies have been seeking commitment from countries, such as Cayman, to provide. It relates to the names of owners of registered companies and their beneficial owners i.e. individuals directly or indirectly linked to those companies. It especially relates to the creation of shell companies for the purposes of tax evasion or hiding money. Both Minister Panton and Premier McLaughlin have said that the creation of a central public register is not something Cayman is willing do since it already has effective measures in place for tax information sharing and transparency. Chief among the reasons previously cited for not agreeing to a public register has been the fact that it will remove the competitive edge that Cayman has as a financial services jurisdiction and open its clientele up to competitors.
However, we would argue that whether or not we have a “public” registry or a “centralised” registry is a questions of “tomayto” versus “tomahto.” The end result is the same in both cases. And the end goal is for beneficial ownership information to be available to other countries (without having to ask for it) for taxation and law enforcement purposes.
Whatever we want to call the process, or how we choose to describe it, the information is going to be public in the end anyway.
Regardless of any public relations spin placed on it by our elected officials, a “public” register and a “centralised” register amount to much the same thing.
The only difference between a “public” register and a “centralised” one is that any random and anonymous Joe Blogs will not be able access the information. But that was not the point anyway!
The goal behind the push for beneficial ownership information was to do away with banking secrecy in the Cayman Islands and to have all ownership and investment information open to tax authorities in individuals’ and companies’ home countries.
And judging by the announcements coming from both the Cayman Islands leadership and the Foreign & Commonwealth Office (FCO) on the issue, that goal has been achieved.
So while we argue and quibble over the differences between a “public” register or a “centralised” one – we are missing the point. And that point is that the former foundation of the Cayman Islands as an offshore banking centre – our banking secrecy laws, are soon to be no more.
