Cayman Islands: Building on Success at Home and Internationally

Every book in the business section of the book store will tell you that success hinges on having a great mission statement. Cayman Finance has one, and it is a mouthful:

Cayman Finance's mission is to protect, promote, develop and grow the Cayman Islands financial services industry through cooperation and engagement with domestic and international political leaders, regulators, organisations and media; to promote the integrity and transparency of the Industry by legislative and regulatory enactment; and to encourage the sustainable growth of the Industry through excellence, innovation and balance.

Well, no one could fairly accuse this organisation of lacking in ambition. But big ideas don't get you very far in business, or in our tough business environment. The true test is whether or not you can live up to your mission statement in the real world. Consider the following sampling of our recent and ongoing efforts and I think you will agree that Cayman Finance is successfully putting ideas into action.

Let's grab a couple of random words from that mission statement and hold them up to the light. What is being done to promote the integrity and transparency of the industry on the legislative front?

With the Throne Speech and budget address dominating the agenda for the 2016 summer sitting of the Legislative Assembly, it was something of a surprise to see the long-debated Confidential Information Disclosure Law, 2016 ushered swiftly into force. The Disclosure Law repealed what had been derided by critics as "the Caymans' bank secrecy law," which threatened criminal penalties for the unlawful breach of confidentiality. The new law puts such matters squarely back into the hands of the civil courts. Given that the capacity for criminal proceedings had never been acted upon during the law's entire 40 year history, the repeal is more important for what it indicates than for what it does. It signals a modern approach, waving away the spectre of criminal prosecution and presenting a clear view of the various pathways towards lawful disclosure of otherwise confidential information for proper purposes.

Further proof that the Cayman Islands has found the correct balance between the right to privacy and the need to actively participate in the fight against financial crime is found in the conclusion to the negotiations with the UK on registration of beneficial ownership interests. The proposal for the registration of beneficial ownership of companies grew out of G8 and G20 discussions about how to counter cross-border tax evasion and avoidance. The UK publicly took the lead in pushing this strategy, insisting that the UK's Crown Dependencies and Overseas Territories make a plan to implement central registers of beneficial owner information. Initially, the central registers were to be open to the public. Counter-productively, the contents of the registry were to be 'self-declared,' meaning that instead of information being collected and verified by a licensed and regulated corporate service provider, the information would be provided directly from the company themselves.

The Cayman Islands, through the Ministry of Financial Services and supported by Cayman Finance, took the view that the proposal was a retro-grade step that would cost a fortune and add nothing to the fight against cross-border tax evasion or other crimes. In a well-reasoned and sensible response to the public consultation on the initiative, Cayman highlighted that the existing system, in place for more than a decade and functioning as intended, was not only adequate, but in fact superior to what was being proposed.

In the end, the UK agreed to our proposals. Licensed and regulated corporate service providers will continue to gather, verify and record beneficial owner information. A centralised technological platform will allow the proper authorities to access information through one portal, rather than having to deal with separate corporate service providers individually. Beneficial ownership information will not be accessible by the wider public and the existing gateways to legal access will remain in place.

So for those keeping score at home, that's two points in the 'win' column under 'integrity and transparency'. One might have expected the next sitting of the Legislative Assembly to be less ambitious. However, in what was perhaps a record-setting performance, 22 bills were considered in the course of just the first week or so, of the October sitting, with the Minister of Financial Services seldom off his feet. The flurry of activity was in large part in preparation for the upcoming Caribbean Financial Action Task Force's (CFATF) mutual evaluation process, currently scheduled to kick off in Cayman mid-2017. To get ready for the on-site CFATF visit, the Cayman Islands government, with the input of Cayman Finance and other stakeholders, undertook a full review of the financial sector's regulatory framework. The mandate was simple: to ensure that our regulatory structure is sufficient to not only meet our core obligations to the international community but to place ourselves at the head of the class on matters of sound regulation and compliance.

The result was a raft of enhancements to the regulatory framework. Some changes, such as those to the Monetary Authority Law, the Auditors Oversight Law and the Companies Management Law, serve to strengthen existing standards and provide greater power and flexibility to the regulator. Other initiatives, such as the Non-Profit Organisations Law, step into new territory and were perhaps more controversial.

The Non-Profit Organisations Law provides for the regulation and monitoring of all non-profit organisations which solicit contributions from the general public. It responds directly to FATF Recommendation 8, which focuses on combatting the abuse of these kinds of organisations for the purposes of financing terrorist activities. Concerns were raised about the impact that this may have on fundraising efforts by local Cayman Islands charities. To pick up another key word from the mission statement, careful balance was required. Time will tell if the correct balance has been struck, but we can be confident that the new law meets the FATF recommendation and serves to put the Cayman Islands in good stead in that regard.

With all of this happening in the Legislative Assembly, one may have expected things to be quiet on the diplomatic front, but October also saw the Cayman Islands play host to Britain's new overseas territories minister. Joyce Anne Anelay, the Baroness Anelay of St. Johns, was the first OT minister to visit all three of the Cayman Islands and spent some time with representatives of Cayman Finance, discussing international initiatives. You can read more about this visit and some of our other diplomatic efforts in Cayman Finance's Year in Review. In the meantime put a checkmark next to cooperation and engagement with international leaders in the mission statement.

Also on the international front, the AIFMD passport initiative remains a key area of interest for Cayman Finance. Steven Maijoor, chairman of the European Securities and Markets Authority, announced in an October 11 speech that the next areas of focus for the AIFMD passport include as a priority the continuing assessment of whether to extend the passport to Bermuda and the Cayman Islands. Cayman Finance has this important initiative squarely in focus as we move through a highly uncertain post-Brexit landscape.

Another area where Cayman Finance is seeing good progress is on the issue of correspondent banking. Onshore banks have been engaged in de-risking efforts, and their legitimate desire to stay on the right side of the regulator has caused an unfortunate side-effect. Some onshore banks have simply terminated correspondent banking relationships in the Caribbean outright. The Office of the Comptroller of Currency of the US Department of the Treasury has responded helpfully by issuing clear guidance to the effect that banks are expected to undertake periodic risk evaluations and make individual decisions based on those results, rather than just lop off relationships with foreign financial institutions as a block. This is another area where Cayman Finance will be fully engaged in the coming months.

The year ahead contains a great deal of uncertainty – we are all watching the Article 50 Brexit vote and the Trump White House in suspense – but our mission statement is sound in theory and working in the real world. The path forward through all of this uncertainty is the same path that has taken us this far: stick with the mission. It's working.

About the Author

Barbara qualified as a Barrister and Solicitor in Ontario, Canada in 1997 and is called to the bar in Bermuda and the Cayman Islands. Barbara is a contributing author of a number of texts, including Neate and Godfrey on Bank Confidentiality and the International Guide to Money Laundering Law and Practice and is an active member of Cayman Finance's International Relations Committee. Barbara is the Director of Knowledge Management for Appleby Global, stationed in Appleby's Cayman Islands office.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions