The Cayman Islands Government has passed a number of amendment laws to strengthen Cayman's anti-money laundering and counter-financing of terrorism regime. The laws, published on 8 August 2019, are intended to help address certain recommended actions in Cayman's legislative framework identified by the Caribbean Financial Action Task Force in its evaluation report published in March 2019.
The Companies (Amendment) Law, 2019, the Limited Liability Companies (Amendment) Law, 2019 and the Limited Liability Partnerships Law (Amendment) Law, 2019 each amend their respective principal laws to enact changes to the filing, maintenance and availability of information in respect of such Cayman entities. Similar amendments apply for each type of entity but the following is a summary of the amendments as they relate to Cayman companies:
(a) commencing 7 November 2019 (for companies incorporated after 8 August 2019) and 7 February 2020 (for companies incorporated on or prior to 8 August 2019), voting rights in respect of each shareholder must be recorded in the register of members of the company;
(b) with immediate effect, the period for filing changes to the register of directors of the company with the Registrar has been reduced from 60 days to 30 days;
(c) the penalties for failure to establish or maintain a beneficial ownership register have been increased to CI $25,000 (US $31,000) for a first offence, CI $100,000 (US $122,000) for a second offence and ability for strike off by direction of the court for a third offence. Failure to comply with any notice or to provide information under the beneficial ownership legislation will, on conviction, incur a fine of CI $25,000 (US $31,000) for a first offence and CIS$50,000/ US $61,000 (or two years' imprisonment) for a second or subsequent offence; and
(d) the Cayman Islands Registrar of Companies (Registrar) shall be obliged to provide information to other regulatory bodies such as the Anti-Corruption Commission, Cayman Islands Monetary Authority, Financial Crimes Unit of the Royal Cayman Islands Police Service, Financial Reporting Authority, Tax Information Authority and any other competent authority (Regulatory Authorities) upon request from such regulatory body.
Similar changes to Cayman trusts have been introduced by the Trusts (Amendment) (No. 2) Law, 2019 that requires trustees, wherever based, of Cayman Islands law governed trusts to keep and maintain accurate and up to date records in relation to settlors, contributories, beneficiaries, protectors, enforcers, service providers and controlling persons as well as accounting records. It also requires the Registrar of Trusts, trustees, and other persons who exercise ultimate effective control of trusts, to share information on registered trusts with Regulatory Authorities and provides for sanctions to be imposed for failure to provide such Regulatory Authorities with required information in a similar fashion to the Registrar, as set out above in respect of companies.
With effect from 1 October 2019, an additional amendment of significance contained within the Companies (Amendment) Law, 2019 will require the names of the current directors and alternate directors of all Cayman companies to be publicly available from the Registrar on the payment of a fee of CI $50 (US $61). The information available is limited to the names of the current directors and alternates and does not include any other personal details such as address, date of birth or nationality. A search may be conducted in relation to a specific company only and may only be made in person at the offices of the Registrar. The same requirement has been made in respect of managers of limited liability companies under the Limited Liability Companies (Amendment) Law, 2019.
In terms of required actions - clients are advised to:
- contact their registered office provider to ensure that the register of shareholders will be updated with the relevant shareholder voting information by the required deadline;
- in the case of investment funds, contact their fund administrators to ensure that the register of shareholders of their respective funds will be updated with the relevant shareholder voting information by the required deadline; and
- take the opportunity to verify the information contained in the register of directors or, in the case of limited liability companies, managers held at the registered office filed with the Registrar.