The system agreed by the UK and the Cayman Islands over how beneficial ownership information will be shared with the relevant authorities is safer than a centralised public register because the new platform for access will not require information to be aggregated in one place, which would have made it vulnerable to hackers, according to Financial Services Minister Wayne Panton. He told the Legislative Assembly Monday that the threat from online criminals is diminished because the data is retained by the individual financial institutions, and overseas authorities must use a local agency to access requested information.
Answering a number of questions from Opposition Leader McKeeva Bush about the new system of sharing information with UK law and tax authorities regarding the beneficial owners of companies registered here, Panton was emphatic that the system was not a public central register and there would be no aggregated information on the technology platform being created to facilitate the requests from the UK and allow the data to be sent as quickly as possible.
The minister explained that protection from cyber-attacks was a major concern for his ministry and the industry, and government was working with Cayman Finance on the details of the system, which has a technology committee that included people from the sector with relevant expertise.
“We are very concerned that there are sufficient controls and protections in place,” Panton told his colleagues in the LA. “One of the reasons why were so concerned about a central public beneficial ownership register is because once the data is centralised and aggregated, hackers could access the full picture.”
But under the agreement with the UK, the data is separate from the access platform and so only information related to specific requests could be accessed from outside. Panton said he was confident that the approach Cayman is taking to meet the demands of beneficial ownership access by the UK minimises the risk from hacking.
Bush asked if personal information could be given to the UK, but Panton reassured him that the agreement related to the owners of legal commercial entities and not personal information and that nothing shared would be made public. Like the exchange of tax information, the data will only go to law enforcement agencies engaged in legitimate investigations and nothing will be released if the local agency here cannot verify that the request for data relates to a genuine tax or criminal enquiry, he said.
The local agency that will be making the disclosures is expected to be confirmed soon, Panton explained, noting that it would be giving beneficial ownership information to a limited number of UK authorities, such as the National Crime Agency, the Serious Fraud Office or the tax authorities. He said there was a clear understanding and set of protocols to prevent fishing exercises.
Making it clear that system is by far the preferred option of the industry, he said the system meets global standards and told Bush that Cayman had no reason not to support the global fight against financial crime and corruption.
“We are not afraid of complying with global standards,” Panton stated, adding that this included beneficial ownership details. He stressed that until a central public register was the global standard, it would be unfair for Cayman to adopt that approach.
“As a jurisdiction, our business is not based on hiding or facilitating tax evasion,” the minister said, as he revealed that there was now talk regarding automatic exchange of beneficial ownership.
“Things are not going to stand still,” he noted. However, he said that, at the moment, Cayman was in a good position because all its competitors, with the exception of the US, was in the same position and there was not much Cayman could do about the “might” of the United States.