Report on the Charities Bill, 2014
The Caymanian Bar Association has prepared a Report on the Charities Bill, 2014.
We refer to the consultation paper issued by the Portfolio of Legal Affairs on the Bill and the proposed regulation of Cayman Islands charitable organisations (the "Consultation Paper").
The Caymanian Bar Association Council ("CBA Council") acknowledges and supports the commitment to globally accepted and practiced standards in the fight against money laundering and terrorist financing and recognises the importance of transparency in that regard. However, trying to make such initiatives the central focus of the Bill, which is intended to regulate voluntary organisations in the Cayman Islands, is misplaced.
For the reasons summarised below, the CBA Council would not recommend the enactment of the Bill in its present form. The intent of the comments in this letter is to raise matters of principle rather than drafting points, which cannot usefully be made when there are many fundamental concerns about the scope and practicalities of a regime along the lines of the Bill.
The Cayman Islands have a long and broad tradition of voluntary fund raising for all manner of worthy causes. This is a critical component of the Cayman Islands society which does not operate a formal, state funded welfare system. In other jurisdictions that do, and have to fund social programmes from government revenues, the primary benefit of charitable status is tax exemption. The position in the Cayman Islands is quite different given the absence of taxation from which exemption could be conferred or any other material advantage of being a charity per se. In fact, true charities (i.e., organisations with exclusively "charitable" purposes) are rare. Most organisations in the Cayman Islands that would colloquially be described as "charitable" actually are not. We will refer to such organisations herein as Voluntary Organisations or "VOs".
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DOWNLOAD Published on October 07, 2014.