Charities Law up for debate

| 28/01/2009

(CNS): Following recommendations by the Financial Action Task Force and local considerations regarding better regulation, the Law Reform Commission has been researching the way in which the activities of charitable organisations in the Cayman Islands can be regulated. A draft Discussion Paper and a draft Bill have now been issued for public comment to help shape a law that will prevent the misuse of charities in terrorist or criminal financing but allow genuine local charities to flourish.

The discussion paper proposes to reform the regulation of charities and not-for-profit organisations in Cayman which are established in the islands to provide a benefit and raise money from the general public for specific charitable purposes. At present there are no rules or regulations covering local charities, which have no official status or registration.

According to the commission, private trusts, foundations and associations that are established here and don’t solicit funds will not be affected by the proposals set out in this paper as the current legislative regime of the Monetary Authority Law (2007 Revision), Companies Management Law (2003 Revision), the Banks and Trust Companies Law (2007 Revision) and the Proceeds of Crime Law (2008) does regulate those entities.

The purpose of this discussion paper is to examine locally based charities operating on island which are currently unregulated under any laws at all. The idea is to establish an official register of charities and a Charities Commission, to create a clear definition of a charity, and to regulate the conduct and fundraising activities of charities.

The commission stated that the a Charities Law would facilitate a clearer and more modern legal framework for charities, which in turn would operate to empower the charitable sector and allow charities to operate with greater freedom and flexibility in responding to changes in society.

“Institutions tend to flourish in any environment which comprisesa strong regulatory framework supported by the independent oversight of a regulator. This in turn inspires a high level of public trust and confidence, all ingredients necessary in attaining the desired successes,” the commission stated in the discussion paper.

The idea of a law to regulate charities in Cayman has been debated since 1994 following the introduction of a private members bill which sought to change the country’s gambling law to allow charities to run raffles and lotteries to raise money. Since then, the issue of charities being vulnerable to criminal financing has also come into play and there is a clear need now to define and protect legitimate charities and also protect the jurisdiction from potential money-laundering through the charity sector.

Both the Discussion Paper and the proposed may be viewed at:

Submissions should be made no later than 13h March, 2009 and should be posted to the Director, Law Reform Commission, c/o Government Administration Building or delivered by hand to the offices of the Commission on 3rd Floor Anderson Square.


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  1. Anonymous says:

    Raffles are illegal gambling whether they are for churches, schools or anything else.  The easiest way to stamp out this menace is to prosecute gamblers consistently and without exception.  If the charity law is amended to licence gambling for charities, then at least the licence can identify an individual accountable for the propoer application of the proceeds of the raffle.

  2. Twyla M Vargas says:


    It is very welcoming to the ears to hear that the FATF with local considerations have awakened the Law Reform Commissions  in regulating the charitable organizations,  and their expeditions on the Islands.  I especially refer to the word expedition, because that is the only way I can describe what has been taking place.  This has been abused and misused in so many ways it aint funny any more.  These charitable organizations should be made accountable.  Take for instance the Number Racketeering, Church raffel racketeering, private foundations and Heritage activities.  Thousands of dollars, and I will go as far as to say millions of dollars are turned over monthly and leave the Island every Monday morning to unknown destinations or just pocketed?

    Governemnt properties are used to hold many of these charitable events including some fly-by-night, Tatch and Tent Churches.  The truth is this has been allowed to go on for too long with no one being made accountable for the process.  The Law is too Licky-Licky in its inforcement to regulate its  the conduct of funraising activities for so-called charitable event.   A church is erected on every corner overnight, having charitable events without property authority.  The days has come, I am sorry to say that every Crook and Cranny has to be checked out.  Too many perons are doing this for gain.  These events should be made to contribute to pre-schools or to some otheer interest on the Island.  Instead of having these big fund rasing events and pocketing all of the money or shipping it away to unknown destinations.  IITS CALLED ABUSE.   They should be charged an application fee and a percentage donation.  Stay Blessed.