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Beneficial Ownership Transparency Bill to Advance Cayman’s AML/CFT Regime

31 August 2023

The Cayman Islands is advancing its AML/CFT regime whilst reinforcing its commitment to global efforts in combating money laundering and terrorist financing with the introduction of the Beneficial Ownership Transparency Bill, 2023.

This Bill, published late yesterday, aligns with the enhanced Recommendation 24 of the Financial Action Task Force (FATF) global standards, ensuring that competent authorities have access to adequate, accurate and current information on beneficial owners of companies.

 

The FATF, an international organisation dedicated to combating unlawful activities and their negative impact on society, establishes the benchmark for countering global money laundering and terrorism financing. The Bill will play a crucial role in maintaining the Cayman Islands’ adherence to these evolving international standards.

 

Beneficial ownership refers to individuals who ultimately own or control an entity. The Bill consolidates the beneficial ownership rules in the Companies Act, Limited Liability Companies Act, and Limited Liability Partnership Act into a single Act. This consolidation streamlines the beneficial ownership framework, bringing ease of use to industry participants and public authorities.

 

Minister for Financial Services, the Hon. André Ebanks, explained that the Bill will reinforce the Cayman Islands’ reputation as a trusted financial services centre.

 

“The introduction of the Beneficial Ownership Transparency Bill, 2023, demonstrates the Cayman Islands’ commitment to upholding global standards, as they evolve, in the fight against money laundering and terrorist financing. By enhancing transparency and ensuring access to accurate information, the Cayman Islands solidifies its position as a trusted global financial centre of excellence dedicated to combating financial crimes. Furthermore, the Bill will proactively assist the Cayman Islands in preparation for the 5th Round of the FATF evaluation process which will commence in 2025,” Minister Ebanks said.

 

Over the last two years, there has been extensive consultation with industry stakeholders, members of the public, government partners, and international entities. The feedback gained throughout these discussions was critical in shaping the creation of the Bill, which has overall garnered positive comments from stakeholders.

 

In addition, to take account of the 2019 commitment made by the Cayman Islands to the UK concerning the introduction of public registers of beneficial ownership information, the Bill contains a clause that would enable Cabinet to make regulations to provide public access to specified beneficial ownership information.

 

However, before public access can move forward, Parliament must approve such regulations at a future meeting of Parliament. Importantly, this will not take place until discussions with the UK and other Overseas Territories, as well as Crown Dependencies, relating to necessary privacy safeguards have concluded in view of the landmark judgement issued by the European Court of Justice in November 2022. The judgement struck down public access for beneficial ownership registries in the EU on the basis of their interference with privacy and data protection rights.

 

Minister Ebanks is expected to present the Bill at a meeting of Parliament anticipated for the fourth quarter of this year. If the Bill is passed, the existing legal obligations will remain in place until the new provisions are introduced in a phased approach. The Ministry of Financial Services and Commerce is also working on developing accompanying regulations and guidance, which will undergo consultation with industry members in due course

For more information, please contact financialservices@caymangov.ky

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