New Bill in the Cayman Islands Looks to Enhance Money Laundering Fight
GEORGE TOWN, Cayman Islands – A new bill designed to enhance and consolidate existing beneficial ownership legislative framework has been opened for comment as the government of the Cayman Islands seeks to align is legislation with recommendations of the Financial Action Task Force (FATF) to ensure competent authorities have access to adequate, accurate and current information on beneficial owners of companies.
The Beneficial Ownership Transparency bill is designed to enhance the country’s anti-money laundering regime and officials said it will play a crucial role in the maintenance of adherence to evolving international standards.
The bill in its current construct, only improves access for law enforcement and relevant agencies but has provisions to allow public access to information on ownership of entities.
However this will not happen before Cayman and the other territories have engaged with the UK over privacy and data protection rights.
The bill consolidates the beneficial ownership rules in the Companies Act, Limited Liability Companies Act and Limited Liability Partnership Act into a single law.
Financial Services Minister André Ebanks explained that it will reinforce the Cayman Islands’ reputation as a trusted financial services center.
“The introduction of the Beneficial Ownership Transparency Bill, 2023 demonstrates the Cayman Islands’ commitment to upholding global standards, as they evolve, in the fight against money laundering and terrorist financing,” he said.
“By enhancing transparency and ensuring access to accurate information, the Cayman Islands solidifies its position as a trusted global financial centre of excellence dedicated to combating financial crimes. Furthermore, the bill will proactively assist the Cayman Islands in preparation for the fifth round of the FATF evaluation process, which will commence in 2025,” the minister added.
Officials said that over the last two years, there has been extensive consultation with industry stakeholders, members of the public, government partners and international entities and government said the feedback was critical in shaping the creation of the bill.
The new bill also ties into the 2019 commitment made by the Cayman Islands to the UK regarding the introduction of public registers of beneficial ownership information.
The proposed legislation contains a clause that would allow Cabinet to make regulations to provide public access to specified beneficial ownership information, however, parliament must approve those regulations at a future meeting, which the ministry said will not take place until discussions with the UK and other British Overseas Territories, as well as Crown Dependencies, relating to necessary privacy safeguards have concluded.
These discussions will be informed by the landmark judgment issued by the European Court of Justice in November 2022 striking down public access for beneficial ownership registries in the EU on the basis of their interference with privacy and data protection rights.
Ebanks is expected to present the bill at the next parliament, and if passed, the existing legal obligations will remain in place until the new provisions are introduced in a phased approach.
The Ministry of Financial Services and Commerce is also working on developing the regulations and guidance, which will undergo consultation with industry members.
