May 12, 2021

Back door for cops in Cayman Islands

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State agrees private access to company records for UK agencies

Police and tax authorities in Britain are to have ‘back door’ entry to company information held by the registration authority in the Cayman Islands, one of the better-known offshore havens for companies and individuals looking to keep certain matters private.

The Cayman government has announced that it has signed an agreement with the United Kingdom “to make enhancements to its beneficial ownership system”.

Under the agreement, a “central technical platform” will be established with the aim of ensuring that police and tax investigators, both in the UK and the Caymans, can:

access company beneficial ownership information subject to relevant safeguards
quickly identify all companies that a particular beneficial owner has a stake in
and that companies and their beneficial owners are not alerted to the investigation of their information.

On the face of it, this looks very similar to the kind of ‘back door’ access to digital devices sought by law enforcement agencies, whereby devices could be monitored without the owner ever knowing.

And the term ‘central technical platform’ seems to imply that access, once granted, can continue indefinitely via some computer-based surveillance device or platform.

Snoopers’ Platform

The announcement stressed that “no public access will be given to information on the beneficial ownership of Cayman companies”. Only legally defined authorities can snoop, in other words.

The Cayman government played down the import of the new measures, describing them as an ‘enhancement’ of its current regime: “The mechanism will build on the existing regime in Cayman which prevents the incorporation of companies without the use of a Cayman licensed entity, which is required to verify and record the identity of each company’s beneficial owners.

“That information is already available to local regulatory and law enforcement authorities on lawful request and can be disclosed to the law enforcement, tax and regulatory authorities of other jurisdictions, including the UK, through international co-operation arrangements.”

It went on to say that the existing information disclosure regime “is already more wide ranging and effective than that operated in the UK and many other international financial centres”.

Tagging the enhanced snooping powers as “business as usual, but faster”, Cayman Finance CEO Jude Scott said: “We have agreed to an enhancement to our system which will help the UK law enforcement agencies access that information with the utmost urgency, but in a way that is also appropriate for our jurisdiction. This is not a public central register.”

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