New Cayman Islands Bill proposes to expand beneficial ownership register

Published on 30 August 2023, the Bill is the result of extensive consultation with industry stakeholders, members of the public, government partners and international entities. It is intended to fulfil the commitment made by the Cayman Islands in 2019 concerning the introduction of public registers of beneficial ownership information. It will also help prepare for the fifth round of the Financial Action Task Force (FATF) evaluation process due in 2025, the Cayman Islands Minister for Financial Services says.

The Bill consolidates the existing beneficial ownership rules in the Companies Act, Limited Liability Companies Act, and Limited Liability Partnership Act into a single piece of legislation. It will support the Cayman Islands AML regime's compliance with FATF Recommendation 24, which was recently revised to require that competent authorities have access to adequate, accurate and current information on the beneficial owners of companies. The Bill improves access to the register for law enforcement and relevant agencies.

The finance ministry will introduce the Bill in the fourth quarter of 2023, probably at the next sitting of parliament later in September 2023. If it is passed, the existing legal obligations will remain in place until the new provisions are phased in.

The Bill contains a clause authorising the Cayman Islands cabinet to make regulations to open up information held in the jurisdiction's beneficial ownership register to public view, although this will not be implemented until parliament has formally approved the associated regulations.

Before this happens, discussions will be held with the UK and other Overseas Territories and Crown Dependencies relating to the necessary privacy safeguards, to take into account the Court of Justice of the European Union’s November 2022 judgment in the C-37/20 and C-601/20 cases. The judgment found that unrestricted public access to beneficial ownership registries in EU Member States was not acceptable because of the associated 'disproportionate' interference with privacy and data protection rights.

Sources

• Cayman Islands Ministry of Financial Services
• Cayman Islands government (text of Bill)
• Cayman Finance
• Cayman News Service
• STEP International News 24 November 2022: Public access to company ownership registers must be restricted, says CJEU