GEORGE TOWN, Cayman Islands (CMC) — A leading player in the financial industry in the Cayman Islands has described Britain’s decision to compel its overseas territories to identify the owners of registered companies as “a vain attempt to fight global problems like corruption and tax evasion”.

Territories like the Cayman Islands, the British Virgin Islands and the Turks and Caicos Islands will have until December 31, 2020 to create public registers of so-called beneficial ownership or face direct intervention by London.

Chief executive officer of Cayman Finance, Jude Scott, said that the Cayman’s existing verified ownership regime remains in force “and remains superior to existing ownership regimes in the United Kingdom and around the world.

“This vote simply continues the legislative process for potentially requiring changes to Cayman’s ownership regime more than two years from now, during which time there will still be on-going dialogue with the UK.

“The House vote is a vain attempt to fight global problems like corruption and tax evasion by unfairly discriminating against a few jurisdictions — requiring public registers from Overseas Territories but not Crown Dependencies, for example. Global problems require global solutions and standards that apply to all jurisdictions,” he said.

United Kingdom legislators Tuesday backed the amendment to the Sanctions and Anti-Money Laundering Bill that the 15-member regional integration grouping, CARICOM, said could negatively impact the economies of some of its associate members.

In a statement prior to the passage of the legislation, CARICOM said the bill would have an effect on the financial services of the overseas countries and territories including Anguilla, Bermuda, British Virgin Islands, Cayman Islands and Turks & Caicos Islands.

Foreign Office Minister Sir Alan Duncan said the Theresa May government had not wanted to damage the overseas territories’ autonomy by legislating directly.

The amendment would require the UK government to take steps to provide that British Overseas Territories establish publicly accessible registers of the beneficial ownership of companies. It does not include Britain’s crown dependencies, Jersey, Guernsey and the Isle of Man.

Scott said that the Cayman Islands is a transparent jurisdiction that “already meets or exceeds the full range of globally-accepted standards for transparency and cross-border cooperation with law enforcement and tax authorities.

“Cayman became an early adopter of automatic data exchange by signing onto agreements such as the European Union Savings Directive, the OECD’s Common Reporting Standard, US FATCA, and country-by-country reporting principles under the BEPS process.

“The Cayman Islands also has had a world class verified ownership regime in place for more than 15 years whereas only 11 out of 28 EU countries have a register at all. For all of those reasons, the OECD’s Global Forum in 2017 assessed our jurisdiction to be “largely compliant” with the international standard for transparency and exchange of information, the same rating given Canada and Australia.”

He said that the Financial Action Task Force (FTAF) has recognised that verifiable private registers like Cayman’s, which are searchable by appropriate tax authorities and law enforcement agencies remain the more effective approach.

“Recent reporting about multiple defects in the UK’s own current public, but unverified, register system prove the point. The House demonstrated a remarkable display of double standards by voting down a requirement to perform basic anti-money laundering checks on the hundreds of thousands of UK companies formed annually through Companies House in the UK.

“We are a long way from any change in Cayman’s existing verified ownership regime. The Cayman Islands financial services industry will support fully all actions taken by the Cayman Islands Government to assess its options for responding to this unjustifiable encroachment into matters within Cayman’s domestic competence.”

He said in the meantime, Cayman Finance notes the UK government’s explicit assurance that it will work with the Cayman Islands in shaping any implementation of this legislation and that London will respect the Cayman Islands’ constitutional rights and its assurance that it will work with the British Overseas Territory to protect its interests.

“Cayman Finance will support the Cayman Islands Government in ensuring that the UK delivers on these assurances in any proposals to make changes to the Cayman Islands’ globally endorsed existing Anti-Money Laundering regime and it’s highly successful, well-regulated and globally significant financial services industry,’ Scott added.