UK and Cayman clash over financial investigations

British law enforcement officers fighting money laundering are being frustrated by a lack of co-operation by the authorities in the Cayman Islands.

Donald Toon, director of the National Crime Agency (NCA), told the BBC that a number of investigations had led to companies registered in the Cayman Islands but local authorities did not cooperate when asked for information about the owners of these firms.

He said that when his officers asked British Overseas Territories for help “we can generally get from them clear, unambiguous beneficial ownership.

He said that usually when his officers asked British Overseas Territories for help “we can generally get from them clear, unambiguous beneficial ownership information but we are having a difficulty with Cayman”.

“The Cayman government is entirely aware of the UK concerns,” he said.

The Cayman Islands last year introduced a beneficial ownership registry that, under an agreement struck with the UK government two years ago, is supposed to respond to British law enforcement requests within 24 hours and in urgent cases within one hour.

The Foreign and Commonwealth Office released a statement indicating that the Cayman Islands government had pulled out of this agreement, known as an “exchange of notes” in reaction to the UK parliament’s threat to impose publicly accessible beneficial ownership registries in the overseas territories. This has made co-operation on crime fighting “more difficult,” according to the statement.

The Office of the Premier responded with a statement that “there is absolutely no merit in Toon’s allegation.”

The government said, in a statement reported by the Cayman Compass, the “complaint is a gross misrepresentation of a single situation and is no basis on which to accuse the Cayman Islands of being uncooperative.”

Cayman and the UK have been in a row over a decision by the UK parliament to insert a clause in the recently passed UK Sanctions and Anti-Money Laundering Act that threatens to impose publicly accessible registers of beneficial ownership in the overseas territories, if necessary through an order in council.

Overseas territories leaders called the move a throw-back to colonial rule and argued that the established non-public registers of beneficial ownership in the territories were working well and providing those with a legitimate interest in the information, such as law enforcement and tax authorities, with the information they need.

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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