Financial Crime World

Cayman Islands Registrar of Companies Imposes $5,000 Fines for Beneficial Ownership Noncompliance

The Cayman Islands Registrar of Companies (RoC) has announced fines totaling $5,000 against 19 local companies for noncompliance with the Beneficial Ownership (BO) requirements. This marks the first penalties since the regime went into effect in July 2017.

Penalties for Noncompliance

Companies that fail to maintain up-to-date BO information with the RoC now face removal from the register, a consequence consistent with Financial Action Task Force (FATF) standards. These measures aim to combat money laundering, terrorist financing, and the financing of Weapons of Mass Destruction (WMD):

  1. Cayman Islands Registrar of Companies imposes fines on 19 noncompliant local companies for a total of $5,000.
  2. Noncompliant companies may be removed from the register.
  3. The removal of noncompliant companies enables the Cayman Islands to provide accurate information to international tax and law enforcement agencies.

clear message to Companies

According to Paul Innis, Head of Compliance at the RoC, these penalties serve as a clear message to companies:

  1. Companies are obliged to maintain updated BO information with the RoC.
  2. The Cayman Islands benefits from international information received to aid local and global efforts against financial crime.

Warning Letters Distributed

A total of 18 warning letters were also distributed to Trust and Company Service Providers (TCSPs) for their failure to file restriction notices on companies that had not provided appropriate BO information:

  1. TCSPs received warnings for not filing restriction notices on time.
  2. Companies are required to submit BO details to their TCSPs before a specified deadline.
  3. Failure to comply with these instructions will result in fines.

Amendments to the Law

Since its implementation, amendments to the law have streamlined exemption categories, impacting which companies fall under the law’s jurisdiction:

  1. The Cayman Islands remains committed to combating global criminal activity through an effective BO regime.
  2. Exemption categories have been adjusted to clarify which companies fall under the law’s jurisdiction.

Quote from Dr. Dax Basdeo

Dr. Dax Basdeo, the Ministry’s Chief Officer, shared:

The Cayman Islands remains committed to combating global criminal activity through an effective BO regime. Dr. Dax Basdeo, Ministry’s Chief Officer