Charities - Law Reform Commission
Charities
Description
This project was referred to the Law Reform Commission in 2006. Its origins lie in a Private Member’s Motion (No. 25 of 1994) in the Legislative Assembly concerning proposed amendments to the Gambling Act (1958), to permit raffles for charitable fundraising. Following review by a Select Committee of the Legislative Assembly, it was determined that the issues raised were more appropriately addressed through the formulation of a dedicated legislative framework regulating charitable organisations.
The reform initiative was directed at establishing a permanent charities register, enhancing accountability for charitable funds and donations, and ensuring that charitable activities in the Cayman Islands were conducted in a manner consistent with international obligations, including those relating to the prevention of money laundering and terrorist financing.
Terms of Reference
The Commission examined relevant Financial Action Task Force (FATF) recommendations, in particular Special Recommendation VIII on non-profit organisations, which seeks to prevent the misuse of charitable organisations for terrorist financing.
The Commission also undertook a comparative review of legislative models regulating charitable organisations in other jurisdictions, including New Zealand, the United Kingdom, New South Wales, Bermuda, and Barbados to inform the development of a clear, modern and effective regulatory framework.
Outcomes
On 23 January 2009, the Commission published a discussion paper entitled “Regulation of Charitable Non-Profit Organisations in the Cayman Islands”, together with a draft Charities Bill, 2009, for public consultation.
The proposals within the paper focused on the establishment of a regulatory regime for charities, including registration requirements, oversight mechanisms and measures to give effect to FATF Special Recommendation VIII.
Following public consultation, revised draft legislation was prepared and further consulted upon in 2009. On 31 March 2010, the Commission submitted its final report, titled “Review of the Law Regulating Charitable Organisations in the Cayman Islands”, together with the draft Charities Bill, 2010, to the Attorney General.
The Bill proposed the establishment of a permanent charities register and regulatory mechanisms to enhance greater clarity, certainty, transparency and accountability in the charitable sector.
The reform process ultimately culminated in the enactment of the Non-Profit Organisations Act, 2017, which was passed by Parliament on 27 March, 2017, received royal assent on 28 April, 2017 and came into force on 1 August, 2017.
