US must sign beneficial ownership deal first, says Caymans

Added 18th May 2016

The Cayman Islands will not adopt a mechanism for the exchange of beneficial ownership information that is not agreed by the US, Cayman Islands’ premier Alden McLaughlin said.

US must sign beneficial ownership deal first, says Caymans

At a press conference on Tuesday, McLaughlin called for a level playing field in terms of financial transparency and stated that a standard without US participation “is not a global standard”, reports the Cayman Compass.

McLaughlin’s comments follow his attendance at the anti-corruption summit in London last week, which saw 40 countries come together to develop a global standard on the automatic exchange of beneficial ownership information.

Chilling effect

Although represented at the summit by secretary of state John Kerry, the US advised that it was not in a position to even sign the summit communique, which outlined the steps needed to combat corruption as agreed by attendees.

At the press conference, McLaughlin said the “temperature in the room fell about 10 degrees” when he pointed out that the fight against corruption would not work if the G20 nations, the US in particular, did not sign up.

The premier admitted that his comments were received with hostility, but it was an opportunity he could not pass up, reports Cayman News Service.


Cayman Islands’ financial services minister Wayne Panton criticised the hypocritical stance of the US in singling out overseas territories for a lack of transparency.

Referring to a 2008 comment by president Barrack Obama that a single address in the Cayman Islands “supposedly houses 12,000 corporations”, Panton pointed to the US state of Delaware where one address alone reportedly has 285,000 companies registered there.    

He said that all of the companies registered in the UK crown dependencies and overseas territories, with the exception of the British Virgin Islands, would still be less than those registered at a single address in Delaware.

No mechanism yet

While the premier voiced his support for the initiative, he emphasised that Cayman has not agreed to a specific method for exchanging any information.

“For the record, Cayman has not agreed to implement a mechanism [to exchange beneficial ownership data]. Indeed, there is no mechanism to implement. It does not yet exist,” he said.

“What we have agreed to is to participate in the global discussion that will lead to the development of such a mechanism.”

Secrecy law repealed

The Cayman Islands announced last week that it will repeal its Confidential Relationships (Preservation) Law, commonly known as the ‘secrecy law, by September 2016.

In addition, the government has passed legislation that completely abolishes the use of bearer shares, which can be used to conceal the identities of beneficial owners. Bearer shares were immobilised in 2000. 

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Eventually somebody spoke honestly

The FATCA and the huge torrent of rules spawning in the World without any root in the Law of many Countries and violating the main principle in terms of freedom of enterprise are going to the end. To fight the terrorism is a sacred duty but to know the account of the people and the B.O. is only an excuse to control the World through the banking system. The Banks are only market players and not Institution as Justice, Health, School. They can't issue rules the people must abide by because they are counterpart and not over-the part. The word "risk" is always on the top of because there is someone is getting his income from that.

Posted by: Roberto Gallo, 19 May 2016

About Author

Kirsten Hastings

Senior Reporter

Kirsten is a senior reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2015 after two years working as a reporter covering the staffing and recruitment industry. Kirsten has a Masters in Financial Journalism from the University of Stirling. 


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