The Registrar of Companies (RoC) is imposing penalties and issuing warning letters to companies that fail to submit accurate information on their ultimate beneficiaries (their 'beneficial owners').
As of 1 February 2021, the RoC had levied 19 administrative fines – at a rate of $5,000 per fine – against companies for noncompliance with beneficial ownership (BO) requirements. Head of Compliance Paul Inniss noted that warning letters were sent to the companies prior to the fines being levied. If the fines are not paid, and/or the companies involved continue to not comply, the Registrar will remove them from the companies register.
'There are consequences to not maintaining current BO details with RoC, and these consequences are in line with Financial Action Task Force standards to fight money laundering, terrorist financing, and the financing of weapons of mass destruction', Mr Inniss said.
'By enforcing our local legal requirement for companies to maintain current BO details with the RoC, Cayman can provide better information to international tax and law enforcement agencies for their investigations', Mr Inniss said. 'The Cayman Islands also receives information from international agencies for our own investigations, so we understand how valuable this information can be in fighting financial crime locally and globally'.
He further explained that TCSPs also can be fined in relation to BO noncompliance, if they do not fulfil their legal responsibilities to file restriction notices that curb companies' abilities to conduct certain business activities if they have not provided BO information.
As of 1 February, the RoC had therefore issued warning letters to 18 TCSPs that had not filed restriction notices. The TCSP letters direct the companies to file BO information with their TCSP, by a stated deadline, in compliance with the Companies Act (2021 Revision). Failure to comply with the warnings can result in companies being liable for the administrative fines.
As the competent authority for BO in the Cayman Islands, the RoC has the legal power to enforce BO compliance.
The RoC sits within General Registry, and the General Registry is under the remit of the Ministry of Financial Services.
The Ministry's Chief Officer Dr Dax Basdeo said that enforcing international standards is part of maintaining an effective regime.
'Cayman is committed to doing its part to fight global criminal activity, and having an effective BO regime is a core component of this commitment', Dr Basdeo said.
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