Cayman Rejects Beneficial Ownership Registry
The Cayman Islands has published a new report stating that, while it will not introduce a central registry of information on the beneficial ownership of companies, it will tighten up its beneficial ownership regime in other areas.
The report follows industry consultation between November 2013 and February 2014 and broadly concludes that the territory’s existing regime is adequate and already complies with international standards and in particular the recommendations of the Financial Action Task Force (FATF).
Under the current system, Corporate Service Providers (CSPs) have been required to maintain details of the beneficial owners of companies since 2000. The report notes that this information is already available to law enforcement and tax and regulatory authorities upon request.
The Cayman Islands is to make a number of changes to its arrangements this year however. The key changes proposed include the banning of bearer shares (negotiable instruments that accord ownership in a legal person to the person who possesses the bearer share certificate, which have been immobilized since 2001), and a new requirement for CSPs to designate a natural person resident in the Cayman Islands to be responsible for responding to requests for beneficial ownership information and the monitoring and testing of information held at specified intervals.
The report also includes an undertaking to enact legislation requiring CSPs to produce beneficial ownership information to tax and legal authorities within 24 hours; to codify a definition of relevant terms such as “beneficial owner” and “control;” and to enable Government agencies and authorities to wind up an entity (either regulated or unregulated) that has not complied with legal or beneficial ownership requirements within a specified timeframe.
