In 2015, the Cayman Islands’ government analyzed the possibility that its favorable laws were being used to launder money. The British territory found, to little surprise, that it “faces internal and external money laundering and terrorist financing threats,” making it a potential home for international fraud, tax evasion, and drug trafficking.
Today, the notorious tax haven took a large step in tackling the problem, promising to publish the identities of everyone who owns a company there by 2023. That would bring the island nation in line with a law passed last year by the United Kingdom, and with EU directives.
“We will advance legislation to introduce public registers of beneficial ownership information,” the islands’ government said in a statement.
As a hefty offshore financial center, the tiny British Overseas Territory has played a role in some of the 21st century’s biggest corporate scandals. Enron used nearly 700 entities there to hide enormous debts from its balance sheet. Bear Sterns and Lehman Brothers, the two American casualties of the 2008 financial crisis, both placed billions worth of toxic assets there. In the run-up to that crisis, Citigroup parked enormous investment vehicles in the Caymans to remove them from its balance sheet. When they collapsed, the debts moved to the US and American taxpayers footed the bailout.
The territory has also been linked to alleged government corruption. Mining giant Glencore allegedly routed more than $75 million, which should have gone to a Congolese state company, to a Cayman entity owned by an Israeli billionaire friend of the Congolese president. The billionaire, who denies any wrongdoing, is alleged to have paid bribes to Congolese officials.
Greater transparency will hinder those trying to hide money on the islands, where it is now almost impossible to find out who owns a company registered there, anti-corruption campaigners say. “Once public registers are brought in across all the British Overseas Territories and Crown Dependencies, it will be much harder for the criminal and corrupt to use UK tax havens to hide and move stolen wealth,” said Naomi Hirst, a senior campaigner at anti-corruption NGO Global Witness.

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