International Asset Tracing in Insolvency: The Cayman Islands

The following is an excerpt from International Asset Tracing in Insolvency (Oxford University Press), edited by IAAR Advisory Board member Felicity Toube. Toube will be a speaker at IAAR's 2011 Cross-Border Asset Tracing and Recovery Conference at the Waldorf Hilton in London, June 12-14.

The Cayman Islands is a sophisticated offshore financial center, with very significant levels of investment, and the Cayman Islands courts are well used to dealing with the complex financial disputes of all kinds, including asset tracing and recovery.

The ownership of land in the Cayman Islands is governed by the Registered Land Law (2004 Revision) (the Land Law). Section 4 of the Land Law provides that a Land Register shall be established and maintained on Grand Cayman, and section 4(e) provides that the Land Register shall contain "an index, in alphabetical order, of the names of the proprietors of land …" (the Index of Owners). The Index of Owners is open to inspection, pursuant to section 35 of the Land Law.

Additionally, if a person owns a parcel (or parcels) of land in the Cayman Islands, copies of the land register in relation to that parcel can be obtained upon request, which sets out, inter alia, details of any mortgage or charge which is registered against the parcel. Upon request, a certified copy of the instrument of transfer in relation to the property can also be obtained, which sets out details of whom the owner purchased the land from and the amount paid for it.

If the identity of the owner or land is not known, a search of the Land Register can be undertaken in order to determine who is the registered proprietor of the property. If only its physical location in the Cayman Islands is known, the registry map at the Land Registry is open for public inspection, and can be inspected in order to determine the registration block and parcel number, and the Land Register can then be inspected in order to determine the registered proprietor of the land.

Accordingly, determining whether an individual or a company owns land in the Cayman Islands is a relatively straightforward and inexpensive process.

Companies

In the event that the name of a Cayman Islands company is known, a search of the register of companies can be undertaken to determine whether the company is registered as a Cayman Islands company. Additionally, the Registrar of Companies maintains an online information system called the Cayman On-Line Registry Information System (commonly referred to by the acronym ‘CORIS’). Subscribers to CORIS can carry out searches on Cayman Islands companies to determine various basic information about such companies, including: the company number; the date of incorporation; the type of company; the location of the company’s registered office; and the status of the company (i.e. whether it is active, in liquidation, or has been struck off the register).

All Cayman Islands companies are required, by section 40 of the Companies Law, to maintain a register of members or shareholders, which contains details of the names and addresses of the members, the number of shares held by each member, the date on which the names of the members were entered into the register, and the date on which any person ceased to be a member.

Section 44 of the Companies Law provides that the register of members of a company must be kept at the company’s registered office, except in the case of an exempted company where the register can be kept at any place within or without the Cayman Islands. Section 44 also provides that the registers of members of all companies, other than exempted companies, are open to inspection by the public.

As at the end of March 2009, there were a total of 270 banks operating under the supervision of the Cayman Islands Monetary Authority’s Banking Supervision Division, including those which the Monetary Authority describes as ‘over 40 of the world’s top 50 banks’. The legal framework for Cayman Islands banks is provided by the Banks and Trust Companies Law (2009 Revision) and the Monetary Authority Law (2004 Revision). Neither of these laws, however, provides for any form of central register of bank account holders. Accordingly, there is no procedure available to determine whether an individual or other entity holds any bank account in the Cayman Islands.

Additionally, in the event that it is known that an individual or corporate or other entity holds an account with a specific bank, it will not normally be possible to obtain any further information about the account (such as the account number, the balance of the account, the source of the funds held in the account etc) because of the provisions of the Confidential Relationships (Preservation) Law (1995 Revision) (the CRP Law). However, the court may order a bank to disclose confidential information if the bank, as a result of the tortious actions of others, becomes a constructive trustee of identifiable assets.