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Cayman Islands continues to advance key financial services initiative

Hon G Wayne Panton MLAWith the benefit of continued local and international engagement with industry, and with international regulatory bodies; as well as specific discussions with the UK, the Cayman Islands continues to enhance its system of sharing beneficial ownership information, in order to more effectively collaborate globally with law enforcement and tax authorities in the fight against serious crime.

Implications from the current “Panama Papers” disclosure have further amplified the need for this global collaboration, but in accordance with accepted international standards in order to underpin confidence in the conduct of international business.

There currently are two main sets of work in Cayman’s programme. The first set is a series of changes, which will begin to be enacted in June this year, to further strengthen Cayman’s legislative and regulatory framework. Overall, the enhancement programme will include amendments to key pieces of legislation, including beneficial ownership provisions; the elimination of bearer shares, which have been immobilised in Cayman since the year 2001; and amendments to the Confidential Relationships and Preservation Law.

Since summer 2015, a working group led by the Ministry of Financial Services, and including representatives from a cross section of Cayman’s financial services industry, has been working to examine existing legislation and to recommend these enhancements to Cayman’s Government, said the Minister of Financial Services Wayne Panton.

‘These amendments are in keeping with our action plan, which was publicised in June 2013 immediately following the UK’s chairing of the G8 Summit, to prevent the misuse of companies and legal arrangements’, he said.

They also build on Cayman’s existing mechanisms for sharing information for tax purposes, including the sharing of beneficial ownership information. These mechanisms, such as tax information exchange agreements; the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; the double tax arrangement with the UK, allow for the sharing of information with more than 90 jurisdictions.

In addition, Cayman automatically shares information with the US and UK, for FATCA purposes; and is committed to the OECD’s Common Reporting Standard along with 95 other jurisdictions, including the majority of G20 countries.

For the second set of work, Minister Panton noted that Cayman has been in dialogue with the UK in relation to the UK’s request for a custom UK/Cayman mechanism for information exchange.

‘Beneficial ownership is a major initiative for the UK Prime Minister, and we support him in the efforts to combat serious crime’, he said. Minister Panton also noted in February this year, the UK accepted Cayman’s invitation to visit and discuss Cayman’s system of sharing beneficial ownership information with law enforcement. This led to Cayman and the UK working together on a joint commitment, which outlines the agreement between the two governments regarding the enhanced sharing of beneficial ownership information.

‘We are pleased that the proposed joint commitment recognises that Cayman’s proposed enhancements to our current beneficial ownership regime represent a viable alternative to the UK’s approach of a central register.  This affirms our longstanding adherence to implementing international standards in a way that is effective and appropriate for our jurisdiction’, he said.

Minister Panton thanked Cayman’s financial services industry for supporting Government’s efforts to further strengthen its system, saying it demonstrates industry’s willingness to comply with globally accepted and practiced regulatory standards.

‘With our decades of engagement with international initiatives, and our current programme for further enhancements, Cayman clearly is collaborating and cooperating with all countries that adhere to global standards for the sharing of information’.

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