EU court ruling may scupper public BO registers

| 01/12/2022 | 45 Comments
Cayman News Service
European Court of Justice

(CNS): A recent ruling from the European Court of Justice (ECJ) may have implications here in the Cayman Islands as the authorities prepare legislation to pave the way for public beneficial ownership registers for offshore entities. The court found that the idea of a public beneficial ownership register to prevent money laundering constitutes a serious interference with the fundamental rights to private life and the protection of personal data. The case was brought by a Luxemburg business after that country adopted the European Union directive for a public register.

Given the pressure from the UK and shifting global standards, the Cayman Islands Ministry of Financial Services is in the process of preparing draft legislation to consolidate beneficial ownership legislation into one law. This includes a proposed approach to introduce public beneficial ownership registers here in line with the request of the United Kingdom.

Officials from the ministry said that they are currently in the consultation phase with a wide cross-section of the financial services industry and considering their feedback on the issue. However, this ruling could have implications for the final bill.

“The intent of the draft legislation is to enhance the transparency framework for legal persons by providing clarity to all users of the beneficial ownership legislation, to reduce the possibility of misuse of our entities as well as ensure efficiency in the framework,” officials from the ministry said in a short release issued Thursday.

“The ministry, with the assistance of external counsel, is currently reviewing the ECJ judgement to determine if there are any implications with respect to the proposal to introduce public beneficial ownership registers.”

This ruling, issued on 22 November, could give those in the offshore sector here who are opposed to a public register ammunition to argue against it.

The court said that the requirement for the public beneficial ownership registers across the member states enables a potentially unlimited number of people to find out about the material and financial situation of a beneficial owner, resulting in the possible abuse of their personal data.

The ruling indicates that the EU legislature’s effort to prevent money laundering and terrorist financing interferes with fundamental rights within the ECHR and that the objective could be achieved in other ways. The court found that interference is not strictly limited to what is necessary or proportionate to the objective

It also said that the provision for data to be made available to the public wasn’t sufficiently defined and identified. The regime introduced by the anti-money-laundering directive amounts to considerably more serious interference with fundamental rights than the previous one, where only competent authorities were permitted to see the information without showing increased benefit in terms of combating money laundering and terrorist financing, the court ruled.

The court said the balance between protecting fundamental rights against the need to combat financial crime had not been struck with the public beneficial ownership register.


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Category: Business, Financial Services

Comments (45)

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  1. wtb says:

    The Paradise Papers pale in comparison to overall network and the amounts.
    Cayman like it or lump it is one of the worlds leading destinations for tax “efficiency”
    With that said like any other business we will continue to operate as close to the mark in terms of the law in order to facilitate continued growth.
    And as it has been said in here it is the onshore regulations that allow us to continue to profit.
    If you want that changed it would mean changing your own regulations which would mean exposing the same people that publicly speak ill of jurisdictions like Cayman.
    In no way should the owner of an offshore structure have to divulge themselves to make others feel as if they have some sort of power when in fact they dont

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  2. Anonymous says:

    Why shouldn’t the public have a right to know who owns and benefits from government law changes, upzoning, tenders, etc.?

    Then the public can take action against corruption.

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    • Otterknow says:

      It doesn’t have to do with corruption. Corruption in Cayman is on a local level, not international. I am in the industry, Cayman is one of the most compliant financial hubs in the world.

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      • Anonymous says:

        Thanks for the clarification but I see corruption as corruption regardless of locality.

        Caymanians need to know who is profiting from the corruption at a local level so they can deal with it appropriately.

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        • Anonymous says:

          Cayman is unwilling to deal with local corruption. Known corrupt Ministers are re-elected every term.

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        • Anonymous says:

          Even if it destroys the financial services industry? Wantng privacy is not a crime. If you had a multimillion dollar investment would you want the complete details pasted across the internet? Including you and your childrens home address? Would you feel safe after that?

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          • Anonymous says:

            If you are a registered voter, your home address is already pasted all over the internet, by our own government.

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        • Anonymous says:

          How many hundreds of Cayman Islands companies does Dart use to obscure beneficial ownership of land, businesses, and other holdings? Why? What purpose does that determined layering effort serve other than obscuration?!? It’s not the taxman…

      • Anonymous says:

        So corruption is an industry in Cayman, wow who would have thought?

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  3. Anonymous says:

    Cayman should have opposed the public registration of this data when first demanded by England however Sir Alldumb the Weak wanted his knighthood.

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  4. Anonymous says:

    money-laundering in cayman?????….never!

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  5. Anonymous says:

    Cayman registration is a legal cesspool; and often an illegal one. Your financial sector has evolved into a very, very corrupt shell. You are certainly not the only jurisdiction on the planet like this, but you really take the cake when you throw out the ‘high ethics and oversight in Cayman.’ You can’t enforce laws of beach vendors, figure out how to process trash – what makes you think your oversight is world class. The money-laundering lawyers are way above your pay grade in sophistication.

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    • not a level playing field says:

      By not mentioning other countries, you seem to be implying that they are bastions of propriety. Nothing could be further from the truth. Their hypocrisy is world class: They constantly put down Cayman — while engaging in exactly the behaviors they accuse Cayman of. So come down off your high horse and be honest about whatever country it is that YOU come from, particularly if it’s the U.S. — !

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    • Anonymous says:

      Hmm I wonder which self riteous, self appointed, bunch of washed up ex-Marxists calling themselves an ngo/charity this one belongs to.

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  6. Anonymous says:

    Welcome to the Clown Show !

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  7. Anonymous says:

    Beneficial ownership registers should only be available to law enforcement, tax agencies and other regulators.

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    • Anonymous says:

      As they already are in Cayman.

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    • Anonymous says:

      Which they already are, cayman already made them available for law enforcement. Nothing els should be required

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    • Anonymous says:

      Thus the coverups will continue…

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    • Anonymous says:

      Agreed. Nosey leftwing journalists have no right to look through my bank accounts so why do they think they have some self appointed right to look through my company information? Of course, law enforcement and tax authorities are welcome to.

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      • P says:

        Said a tyrant’s son from his palace in a former Soviet republic.

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        • Anonymous says:

          So publish your name and financial details then… no thought not.

        • Anonymous says:

          If someone is suspected of a crime, law enforcement agencies can already get all the data they want. I don’t see why you think that gives YOU the right to see MY data though.

  8. Anonymous says:

    All of the EU countries are going to drop this requirement. We should not allow England to continue to push this and push us into competitive disadvantage. While we are at it, all the KYC requirements falling out of FACTS should only be required for persons holding US citizenship. Finally, if the Government caves on this and nothing changes then they should at least force the institutions here that are requiring this information (especially the banks) to create purpose built simplified forms. But to be clear, all of this crap should go, and now.

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    • Anonymous says:

      So scrutinize US citizens, not Saudi, Turkish, Columbian, etc??? Just curious why this was carved out.

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  9. Anonymous says:

    Baseline incorporation status, registered directors and shareholders data should be available for a registration and fee, like in our competitor jurisdictions. In full transparency those portals also record, in the corporate file, who requested what data, when, and why. It should not be harvestable and scrollable catalogue for bored ICIJ, imaginative NGOs, and self-described whistle blowers. GDPR controls need to apply when it comes to UBOs. Law enforcement, tax agencies, and securities regulators already have reasonable and well-trod exchange mechanisms that aren’t broken for accessing all of that.

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    • I have bad BO says:

      Sunshine is the best disinfectant. The Paradise Papers show how Cayman helps the world’s scumbags and how it does so without breaking the law. That is why BO registered are needed.

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      • Anonymous says:

        Perhaps your concerns would be best directed towards several US states that really hide the scumbags you seek.
        The U.S. is the top destination for stashing money illegally, according to a new report from a pro-tax advocacy group. The FATCA IGAs do not impose an obligation of reciprocity on the United States. Rules for thee but not for me.

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        • Anonymous says:

          The US actually prosecutes money laundering, doesn’t just jaw about it. Go back in your hole.

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      • Anonymous says:

        Cayman has BO registers. They are available to law & tax enforcement from many, many countries. But not to Joe Public.

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        • Herald Angel says:

          It is only when journalists and interest groups can see the dodgy dealings of the rich that the truth is known, which is why the various Paper leaks have shown more in a few instances than decades of public authority access. Do you think the tax authorities of dictatorships are going to ask for information about corruption among the ruling family?

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      • Anonymous says:

        Did you actually read the Paradise Papers? If yes, read again and count the number of times the Cayman Islands was mentioned. Feel free to repost after that.

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        • Awesome says:

          Exactly. Cayman is just a parasite to allow interests elsewhere to hide their wealth. You make the point well.

    • Anonymous says:

      Paradise Papers? That’s so 2017

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      • Anonymous says:

        History tends to repeat itself. If anything, it shows how successful money laundering is and thus encourages more to do the same when laws are not enforced. If laws are broken/avoided and not publicly known, it is no surprise that jurisdictions like Cayman flourish with corruption.

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