A recent court case has been touted as a setback for transparency in the Cayman Islands. In the light of a money-laundering investigation in the mainland UK, a British bank asked the Cayman Grand Court to sanction the disclosure of confidential information in the Cayman Islands to the British police, only to be turned down.

A recent court case has been touted as a setback for transparency in the Cayman Islands. In the light of a money-laundering investigation in the mainland UK, a British bank asked the Cayman Grand Court to sanction the disclosure of confidential information in the Cayman Islands to the British police, only to be turned down.

Business transactions in the Caymans benefit from tight confidentiality, which emanates both from the common law and the Confidential Relationships (Preservation) Law (2009 Revision - it was enacted originally in 1977). Cayman Islands law contains some "gateways" through both common law and statutory types of confidentiality. These allow courts to pass confidential information to investigators in London, the United States and elsewhere. They are to be found in the Proceeds of Crime Law of 2008, the Monetary Authority Law, as amended, and the Mutual Legal Assistance (United States of America) Law (1999 Revision).

Section 5(1) of the Confidential Relationships (Preservation) Law states that whoever, (a) being in possession of confidential information however obtained, (i) divulges it; or (ii) attempts, offers or threatens to divulge it; or (b) wilfully obtains or attempts to obtain confidential information, is guilty of an offence and liable on summary conviction to a fine of $5,000 and to imprisonment for two years. This can be waived by a Judge of the Grand Court sitting alone and in camera (s4). It is by this process that the British bank seems to have asked the court for a waiver.

Confidential information is defined quite widely to mean any 'property' whose recipient is not authorised by the principal to divulge, except in the normal course of business. The bank in question was responding to a production order issued by the police under the Proceeds of Crime Act 2002. The Cayman press suggests that the information, although held on computers in London, fell under the jurisdiction of the Grand Court. This is because s3(1) of the Confidential Relationships (Preservation) Law states "...this Law has application to all confidential information with respect to business of a professional nature which arises in or is brought into the Islands and to all persons coming into possession of such information at any time thereafter whether they be within the jurisdiction or thereout."