Financial Crime World

Cayman Islands Takes Steps to Address Deficiencies in Beneficial Ownership Information

Improving Transparency in Financial Services

GEORGETOWN, CAYMAN ISLANDS - In response to deficiencies identified by the Financial Action Task Force (FATF), the Cayman Islands has taken several steps to enhance its beneficial ownership information regime.

Identified Deficiencies

According to a recent report, the jurisdiction had identified eight deficiencies in its system for recording and updating beneficial ownership information. These included:

  • Lack of public access to information on exempted companies and limited liability companies (LLCs)
  • Failure to conduct a specific assessment of money laundering/terrorist financing (ML/TF) risks associated with legal persons created in the Cayman Islands

Addressing Deficiencies

To address these concerns, authorities have taken several measures:

  • Completed a risk assessment for legal persons and arrangements, which identified the risks of ML and TF
  • Added new sections to the Companies Law and Limited Liability Companies Law requiring LLCs and exempted companies to provide lists of managers and directors, maintained by the Registrar of Companies and publicly available
  • Introduced requirements for the register to state whether any share recorded carries voting rights, applicable to companies and foundation companies
  • Reduced the time frame for updating company information from 60 days to within 30 days
  • Increased fines for breaches of beneficial ownership requirements and introduced a mechanism for rectifying improper entries or omissions in the register

Quality Control Mechanisms

To ensure the quality of information received from foreign counterparts, several mechanisms are in place:

  • Policies by the Royal Cayman Islands Police Service (RCIPS), the Cayman Bracero Company (CBC), and the Anti-Corruption Commission (ACC) for monitoring and assessing the quality of information received

Commitment to International Standards

The Financial Secretary welcomed the progress made in addressing these deficiencies, stating: “We are committed to maintaining a robust beneficial ownership regime that meets international standards. We will continue to work towards ensuring that our system is effective in preventing ML/TF and protecting the integrity of our financial system.”

Progress Praised

The Cayman Islands Financial Services Authority (CIFA) has also praised the progress made, saying it demonstrates the jurisdiction’s commitment to implementing effective measures against money laundering and terrorist financing.

Conclusion

While there are still areas for improvement, the Cayman Islands is making significant strides towards meeting FATF standards. The report concludes that the jurisdiction is committed to maintaining a robust beneficial ownership regime that meets international standards.