04 May 2018
The Cayman Islands has accused the United Kingdom of applying an “apparent double standard” to corporate transparency issues, after British parliamentarians backed measures ordering it to publish a register revealing the true owners of its registered firms, while declining a motion for due diligence to be applied to the British public register.
The British Overseas Territory (OT) said it was “deeply aggrieved” over plans by the UK ordering the OTs to publish the registers, and also said it is open to taking legal action.
The plans were endorsed by British parliamentarians through an amendment to the Sanctions and Anti-Money Laundering Bill.
Cayman Islands Premier Alden McLaughlin noted “the apparent double standard adopted by the House of Commons during the debate on the same amendment bill, when it voted down an amendment to the UK’s Companies Act, which would have required due diligence on beneficial owners of UK companies in order to prevent money laundering.”
Critics of the UK’s public register, which went live in 2016, say criminals can easily register companies through it, and that the details submitted by firms are not thoroughly checked.
The new move endorsed by Parliament orders the OTs, but not the Crown Dependencies, to establish public registers of beneficial ownership of information by no later than 31 December 2020.
“Imposing such an obligation on the Overseas Territories while exempting the Crown Dependencies discriminates unfairly against the Overseas Territories,” said McLaughlin.
Cayman said it is “is keeping all options on the table, including a legal challenge to the amendment which violates accepted and conventional constitutional relationships between the UK and the Cayman Islands.”
In response, a UK Government spokesperson said: “The UK has taken a leading role in cracking down on money laundering and is committed to making businesses more transparent, both in the UK and its overseas territories.
“We have a close and long-standing relationships with our OTs and following this amendment our intention is to work together with them to ensure the best possible outcome.”
The UK has been under growing pressure to compel its OTs to establish public registers, which anti-corruption campaigners say will help prevent corporate secrecy and financial crime.
A number of the OTs, including the Cayman, have been used by criminals to hide their illicit proceeds.
Some OTs have also featured prominently in financial crime and data leak scandals such as the Panama Papers.
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