Currently only law enforcement agencies are allowed to access the information on company ownership, including director details, for any businesses registered in the Cayman Islands.

The decision to allow wider access to beneficial ownership records was agreed at the annual UK joint ministerial council.

For at least five years, the UK government has called on overseas territories to introduce publicly accessible registers detailing the beneficial ownership of legal entities but uptake has been slow and there has been resistance due to privacy issues.

The Cayman Islands government has now introduced The Beneficial Ownership (Access Restriction) Regulations, 2024 which will be enacted on 9 December 2024, under the Beneficial Ownership Transparency Act, 2023.

The new regulations ensure safeguards to ensure that information is not disclosed to the public that would establish a threat of serious harm. However, the level of disclosure is much lower than in the UK.

The Cayman position drew on a ruling by the EU court on Sovim v Luxembourg, which determined that only very limited information would be available to the public across member states to ensure EU citizens’ rights to private life and personal data protection.

It said allowing the general public access to beneficial ownership information went beyond what was necessary to achieve the aims of the EU rules, which were designed to improve transparency and tackle money laundering and the financing of terrorism.

In a statement, the Cayman Islands government said: ‘Introducing legitimate interest protocols recognises that access to beneficial ownership information now extends beyond law enforcement to certain members of the public, based on the 2022 EU Court judgment (Sovim v Luxembourg).

‘This judgment balances transparency with privacy rights, by requiring access to beneficial ownership information only where there is a “legitimate interest”.

‘The judgment therefore is an important guide to access based on legitimate interest.’

The EU decision also said that listed persons must be able to request exclusion from these public registers ‘where that information would expose the beneficial owner to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation’.

The Cayman Islands government said: ‘While there is currently no recognised global standard for legitimate interest access (LIA), it is prudent that we carefully balance transparency with privacy rights, while taking the necessary steps to introduce LIA in relevant money laundering and sanctions legislation.’

Cayman Islands based Juan Pablo Urrutia, partner, funds and regulatory, at Harneys said: ‘The LIA Regulations outline the conditions under which members of the public, with a legitimate interest, can access beneficial ownership information.

‘This access is limited to cases where there is evidence of a connection to money laundering or terrorist financing. Legitimate interest groups include journalists, researchers, and organisations involved in anti-money laundering efforts.

‘The Access Restriction Regulations allow individuals to apply for protection from public disclosure if revealing their association with a legal entity would put them or their families at serious risk of harm.’