Cayman Islands issues first fines for beneficial ownership violations

The $5,000 penalties are the first issued since the beneficial ownership register first came into force in July 2017. The country’s Beneficial Ownership Regime requires obligated entities to maintain a register of accurate beneficial ownership information including information about registrable persons in relation to the company/LLC.

Paul Innis, head of compliance at the RoC, has stated that companies who fail to pay the administrative fine of $5,000 or continue to be noncompliant will be removed from the register altogether, which he says, is “in line with Financial Action Task Force (FATF) standards to fight money laundering, terrorist financing, and the financing of weapons of mass destruction.”

“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. 

He adds, “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”.

A total of 18 warning letters have also been issued to Trust and Company Service Providers (TCSPs) for failing to file restriction notices on companies that fail to provide adequate BO information. These letters outline the companies’ requirements to file BO information with their TCSP before the given deadline. Failure to do so will result in a fine. 

Amendments to the law made since it came into force have refined the categories of exemption, meaning that companies once within the purview of the law are now exempt and companies vice versa.

The Ministry’s Chief Officer Dr Dax Basdeo said: “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.”