With reporting deadlines occurring at the end of this month, we are constantly keeping abreast of issues involving unclaimed property and dormant accounts—even ones occurring outside the United States. A recent article caught our attention from CaymanNewsService titled “Law fundamentally ‘flawed’” as it raised some unclaimed property law issues that have and continue to occur state side.
In July, the Cayman Islands passed a law called the Dormant Accounts Law of 2010 that would allow for funds in dormant accounts to be transferred to the general revenue of the islands. Many of the characteristics of the law, such as dormancy periods and due diligence requirements, are similar to that of America’s unclaimed property laws. The general dormancy period for the Dormant Accounts Law is six years and applies to all monies including savings deposits, certified checks, intangible assets and safe deposit boxes in an account held by a financial institution that has been inactive for that period. Also, in addition to the standard due diligence requirement of mailing notices to owners, the Dormant Accounts Law would also require businesses to publish ads in the newspaper when the bank has been instructed not to send correspondence to the account holder.
Recently, however, The Financial Services Legislative Committee of the Cayman Islands (the Committee) sent a memo to the government stating that the law was “fundamentally flawed” as it has potentially dangerous consequences for the financial services industry.
In the eyes of the Committee, neither the financial industry nor the Committee were properly consulted before passage of the bill and the law itself is ambiguous in language. In fact, the scope of the types of accounts that could be seized is almost boundless and could make the Cayman Islands less attractive for financial institutions.
The memo, which included a list of suggested changes and even a rewritten version of the law, is currently in the hands of The Legislative Assembly and will hopefully be reviewed during November’s meeting.
Be sure to check back to see what changes, if any, will be made to the existing law.
Go to the Keane HOMEPAGE