In the latest meeting of Parliament, which started on 4 December and is slated to end on 18 December, the Cayman Islands Government considered legislative changes that will affect virtual asset service providers, companies, and the requirements for witnessing of documents.
The Virtual Asset (Service Providers) (Amendment) Bill, 2020, Companies (Amendment) (No. 3) Bill, 2020, and the Property (Miscellaneous Provisions) (Amendment) Bill, 2020 were presented by the Minister of Financial Services, the Hon. Tara Rivers.
The Virtual Asset Service Providers (VASP) Bill supports the continuing implementation of our VASP regulatory framework by allowing persons engaged in virtual asset services to continue operating as the provisions of the Bill are commenced.
In Cayman, a virtual asset is defined as a digital representation of value, such as cryptocurrency, that can be electronically traded and invested. The VASPs legislation allows CIMA to register, and also supervise, persons and entities who provide virtual asset business services to other persons and/or entities.
The Companies Bill is intended to address four matters.
- It ensures companies conduct risk assessments on clients that are legal entities originating from jurisdictions previously listed by Government as having equivalent anti-money laundering and countering the financing of terrorism (AML/CFT) legislation as the Cayman Islands. This change, designed to strengthen AML/CFT measures within the financial services industry, matches the Proceeds of Crime Law (POCL) and Anti-Money Laundering Regulations (AMLR) amendments made this year. The POCL and AMLR changes shift the responsibility for conducting the risk assessments from Government (via the Anti-Money Laundering Steering Group) to the financial institutions who have clients from those jurisdictions.
- It adds Cayman's Customs and Border Control Services to the list of public bodies in the Islands that may request information from the Registrar of Companies (RoC) for the purposes of AML/CFT (anti-money laundering and countering the financing of terrorism). This will better allow the CBC to fulfil their responsibilities for combatting AML/CFT.
- It will now require all company types to annually file their nature of business. Currently, some company types are not required to do so.
- It takes away the penalty for failing to comply with the RoC's requests for additional information as the penalty is now redundant. The RoC can instead deal with noncompliance by issuing an administrative fine. These fines support Cayman's beneficial ownership regime by ensuring the financial services industry submits and maintains current beneficial ownership information.
The Property Bill aims to address the requirement of physical presence for witnessing documents where it has become more difficult due to the COVID-19 pandemic. The Bill allows a person to use online video technology to virtually witness the signature of deeds and instruments under seal, to validate these documents.
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