User Rating: 5 / 5
If you have been reading the details of the upcoming Beneficial Ownership Platform that the Cayman Islands Ministry of Financial Services plans to implement shortly, you may have seen that there is a flaw, built into the program, which money launderers, and other financial criminals, can literally drive a truck through, defeating the purpose for which the platform was intended, and all to the loss of law enforcement.
The financial services providers, who are to deliver the ownership records, of corporations they form, to the regulator, are only required to do do once a month. This leaves a window, of up to 30 days, during which financial criminals can take their newly formed Cayman corporation, use it to commit money laundering, or some other offense, and collapse their illicit venture, all before the details of ownership are ever made available to the regulator, and thus, to any inquiring law enforcement agency.
I would have thought that someone would have seen this as a potentially fatal flaw; daily input of beneficial ownership data must be uploaded to the regulator, of the new program is to be effective, and nothing less will be sufficient. Bank compliance officers in Europe, and North America, consider yourself duly warned.
Of course, considering that many Cayman Islands financial service providers give their clients a sandwich, consisting of a BVI, not Cayman, company, which is totally opaque, and also owned by a Belize or other trust, the Cayman program is much ado about nothing. Inventive corporate formation firms will always be several steps ahead of any regulatory program that does not take into account international, and multiple, steps and actions, regarding corporate services.
Chronicles of Monte Friesner - Financial Crime Analyst
Contributed by Kenneth Rijock - Financial Crime Consultant
