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Cayman: Uncertainty remains over who will respond to companies requests

tax_1424179686From IFC Review

Cayman Islands government officials are still trying to decide who will be responsible locally for handling formal requests for company and trust ownership information under an agreement they signed with the United Kingdom last month, reports the Cayman Compass.

Cayman lawmakers rejected the creation of a centralized records system for the registry, opting instead for a “central platform” which allows UK tax authorities or law enforcement officials to request specific information regarding company or trust ownership.

Financial Services Minister Wayne Panton said Monday that those requests would be vetted by a local agency to ensure that foreign authorities are not engaging in a “fishing expedition” in seeking that data.

The local agency that will respond to those requests for information has not been selected, Mr Panton said.

“There are one or two possibilities,” the financial services minister said. “This issue will be resolved fairly shortly.”

Mr Panton said Cayman’s version of the beneficial ownership reporting system is envisaged to work this way: When the designated local authority receives a formal request for company or trust ownership information from the US serious fraud office, the UK national crime agency or the relevant British taxing authority, the Cayman authority would then retrieve the data (assuming it was a lawful request) within 24 hours, or sooner if the protocols established allow.

The information will continue to be held by the private sector entity, but Mr Panton insisted Monday that the relevant private entity would not be aware of the request to obtain its information if the request relates to a criminal investigation.

In the case of a tax information request, he said, the entity would be notified.

“If I understand correctly, [Minister Panton] is saying that due process is able to be had in non-criminal matters,” Opposition Leader McKeeva Bush said Monday. “Is it correct that foreign investigative authorities can inspect the register without notification to those whose information is being obtained?”

Mr Panton said no information from Cayman’s ownership registry “platform” could be obtained directly by a foreign agency. Those requests, he said, would have to go through the yet-to-be-named Cayman agency, which would respond accordingly. In the case of a request related to a criminal investigation, Mr Panton said the private entity that holds the records would not be notified of the request.

“You don’t want to tip off the [subject of the investigation],” Mr Panton said.

Opposition Leader Bush questioned whether the UK authorities would agree to protect Cayman against hackers getting into the beneficial ownership registry “platform” and stealing private companies’ or trust funds’ information.

Mr Panton said this is one of the reasons why Cayman did not agree to a centralized registry of company and trust ownership as had been suggested years ago by the UK It is also the reason Cayman has insisted on local authorities retrieving the information sought.

“One of our major concerns is to ensure that this [information] is only accessed locally, by our law enforcement people,” Mr Panton said.

Mr Bush seemed incredulous: “Instead of a central registry, it’s called a platform. You don’t think that a rose by any other name is still a rose? They will get out of this centralized platform exactly what they wanted to get out of the registry.”

Minister Panton denied that Mr Bush’s statement was correct: “What we are proposing is not a central register. Is a platform for the access to information which is maintained by the corporate services provider.”

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