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Cayman Islands

29 July 2013

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Action plan on misuse of companies and other legal structures

On 18 June 2013, the Cayman Islands Government made public an action plan on the misuse of companies and other legal structures, which includes provisions on beneficial ownership.

The plan is in accordance with the revised Financial Action Task Force standards to improve transparency of the ownership and control of companies in a way that ensures a level playing field across the world. Furthermore, the actions build on the regime for anti money-laundering and countering the financing of terrorism.

The following actions will be undertaken under the plan:

-   conduct, and share the findings of, a national assessment of money laundering and terrorist financing risks by 2015, through coordinated action by the public and private sectors to assess risks, apply resources and mitigate those risks;
-   further evaluate established policies and legislative measures to ensure that information on the ownership and control for companies and express trusts continues to be effectively and accurately maintained, and that this information continues to be readily available to the appropriate authorities;
-   conduct an assessment of whether a central registry of the beneficial ownership and control of companies is the most appropriate and effective way to improve transparency in support of domestic legal compliance and the implementation of cross-border assistance in accordance with internationally adopted and implemented standards during 2015;
-   continue the longstanding supervision of those who execute company formation in the Cayman Islands, and keep the regulatory regime under review;
-   conduct a review of supervision and regulation of the financial services sector, including category A and B banks, during 2015 to establish effectiveness of supervision and enforcement of existing rules on beneficial ownership;
-   further review corporate transparency including the use of bearer shares (all of which are already immobilised and subject to regulation in the Cayman Islands) as recommended in the Phase 2 Peer Review Report by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, by 2014;
-   maintain its high standards of international cooperation, including the timely and effective exchange of basic and beneficial ownership information on legal persons and arrangements; and
-   continue to negotiate and enter into international tax cooperation agreements and arrangements under the entrustment of the United Kingdom, where appropriate, including tax information exchange agreements and double taxation agreements; intergovernmental agreements in support of automatic exchange of tax information (such as under the United States Foreign Account Tax Compliance Act); and the Convention on Mutual Administrative Assistance in Tax Matters.

The Government has also stated that it will continue its participation in global tax and transparency initiatives, including its involvement on both the Steering and Peer Review groups of the Global Forum; the G5 pilot on multilateral automatic exchange of information; and its commitment to the Convention on Mutual Administrative Assistance in Tax Matters on 7 June 2013.

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