CAPTIVE INSIGHT
When the UK moved forward the concept
of public beneficial ownership registers
for its Crown Dependencies and Overseas
Territories in 2013, during its presidency of
the OECD, Prime Minister David Cameron’s
portrayal of offshore financial centres as
facilitators of tax evasion, while economies
were still reeling from post financial crisis
austerity, generated both significant media
attention and political capital. Where
this initiative completely failed, was an
understanding of the activities of highly
regarded international financial centres.
The Cayman Islands, for example, has for
many years employed a superior means of
recording beneficial ownership information,
which isn’t open to manipulation - as the
UK’s own system is - and provides proper
protection for investors’ wholly legitimate
right to privacy.
Following a period of intensive lobbying,
it seemed that the Cayman Islands had
managed to convince the UK government of
the merits of its system, whereby licensed
corporate service providers don’t just record
the beneficial owners of entities established
in the jurisdiction, but rigorously check the
validity of the information provided. This
stands in contrast to the UK’s self-certification
system of providing such information to
Companies House. It doesn’t take a genius to
understand that if criminals looking to evade
the law and their legal tax responsibilities in
the UK, decide to provide false information
or no information at all, the UK Exchequer
will be none the wiser. If an individual is
intent on laundering money through the UK
banking system, a self-certification system of
beneficial ownership, which is not validated,
provides little or no obstacle to such criminal
enterprise.
When the UK announced in 2016 that
its Crown Dependencies and Overseas
Territories would be establishing central
beneficial ownership registries that provide
automatic access to law enforcement
agencies, including the Serious Fraud Office
and National Crime Agency, it was seen as a
victory for the Cayman Islands. Significantly,
the register would not be open to the public,
but instead leaving the beneficial ownership
information securely in the hands of licensed
corporate services providers. Premier Alden
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