Cayman poised to draw line on global cooperation
Premier Alden McLaughlin in the Legislative Assembly, 15 November 2017
(CNS): Premier Alden McLaughlin has said the Paradise Papers leak was designed to influence the consideration of the latest European blacklist and if Cayman is on it next month, it could mark the end of cooperation. Speaking to members of the Legislative Assembly, he suggested that the Cayman Islands’ continuous and consistent cooperation, its adherence to international financial regulations and standards could be in question. In the face of more threats and challenges to the offshore sector, he said it might be time to draw the line in the sand on trying to jump every hurdle because no matter what the jurisdiction does, it is never enough.
“What is the point of the expense and the trouble we put ourselves and our clients to, to be part of the global solution, if the quid pro quo for that is one threat after another?” he asked his legislative colleagues earlier this month as the budget meeting came to a close.
During the debates on a number of bills to help Cayman remain compliant and ensure it navigates the latest Caribbean Financial Action Task Force (CFATF) review next month, McLaughlin attacked the Paradise Paper leaks as the theft of information but said there was no evidence of anything illegal happening here.
“Cayman is at the leading edge when it comes to the fight against international financial crime, money laundering, terrorism financing and tax avoidance and evasion, or tax crime” he said, adding that Cayman was in a better place than the UK and most other EU countries.
But, he said, it was still fighting to not be placed on the latest European blacklist that everyone could be sure would never include “some of the greatest offenders” or were the least transparent and most uncooperative jurisdictions in the world, such as the United States and China.
As he lauded Cayman’s efforts, he said the country might have to start asking itself whether it was time to stop the cooperation if it led to the demise of the major pillar of Cayman’s economy. He added that the issue was becoming one of morality and lamented the fact that “it has become immoral”, according to the European Union, for people to use low tax jurisdictions as part of their legitimate business arrangements. But he said all investors using Cayman are obligated to pay tax on any profit derived from it in the UK, and questioned how this jurisdiction was at fault or depriving other governments of tax revenue.
McLaughlin raised concerns about the demand for “substantial presence”, which he said was difficult to comprehend as the creation of SPVs for global financial transactions meant presence was irrelevant. He claimed that the sustained efforts to undermine Cayman were all about pushing the jurisdiction out of the financial services business. Whether or not Cayman escapes the pending blacklist, the premier said he had no doubt that the pressure would continue and if Cayman ends up on the list, it will have negative consequences.
But, he said, the Cayman Islands could not make “unreasonable concessions” that threatened the sector. He warned that if Cayman has to pick between the demise of the industry or the blacklist, then he would pick the blacklist. As he spoke about the fight on the country’s hands, he said this was a defining point going forward.
Financial Services Minister Tara Rivers, who brought the various pieces of legislation for passage, said in her own presentation that “gone are the days of The Firm”, referring to the John Grisham book and movie of the same name, as she handed out a cheat-sheet to MLAs for what she called “ammunition” to help them join in the efforts to spread the message that Cayman was not a tax haven shrouded in secrecy. She said that everyone had to do more to promote the jurisdiction’s regulatory environment and promote what Cayman does and what it does not.
“We have to do better as a country; we have to do better as an industry …to get the message out …so people understand who we are and what we do versus what we are not,” she said. “We are not a tax haven and we do not have secrecy laws …We do not have the anonymous numbered accounts …We do not have the double taxation agreements that facilitate the abuse of tax agreements …promoting aggressive tax evasion.”
She said that Cayman has done a number of things and will continue to play an important part in supporting the global economy.
“We have not designed our tax system in a way to try to aggressively market the jurisdiction in a way that creates harmful taxation to other jurisdictions,” she said.
She noted that Cayman has never had direct corporate or income tax but instead had a robust indirect regime of fees. She said Cayman’s tax system was often misunderstood because it is different.
Rivers said it was important that government delivered the message about the value that Cayman adds to the global economy and must get people to understand what the jurisdiction does, as many forces were lining up to undermine that message.
https://t.co/pjZRWbUUiU
Cayman is at the leading edge when it comes to the fight against international crime, money laundering and tax evasion.— The Progressives (@PPMCayman) November 23, 2017
If the Government would stop inundating Cayman with investors’ businesses and companies, maybe Caymanians themselves would stand a chance at survival with their own businesses. As it is now, many Caymanians are being forced out of business only to end up working for a a foreign company. It is unfair to say the least, and a problem caused by a government who themselves see Caymanians as only amounting to secretaries and construction workers. We were the leaders of our own businesses long before this era, and I don’t mean “fronting for a foreigner,” I mean our forefathers and foremothers opened and ran their own business ventures, and made good money off of these too. Not to mention, tourists actually got to see real ancestral Caymanians when they went to purchase an item, take a bus tour, or walk into an office.
Let’s get back to that. And the plus side – less international law controversy.
I have been told that Her Royal Highness Queen Elizabeth has secured an offshore account in the Cayman Islands, so what’s the problem?
The Cayman Islands is a British Territory, Her Royal Highness Queen Elizabeth is entitled to do as she pleases.
Very different than someone from the US evading American taxes.
Was it really so long ago that we have all forgotten S***y bringing suitcases full of cash from Houston?
“During the debates on a number of bills to help Cayman remain compliant and ensure it navigates the latest Caribbean Financial Action Task Force (CFATF) review next month, McLaughlin attacked the Paradise Paper leaks as the theft of information but said there was no evidence of anything illegal happening here.”
Nothing illegal ???? Almost 6 million hits on google.
https://search.yahoo.com/search?ei=UTF-8&fr=crmas&p=paradise+papers+cayman+islands
Can we please stop this bs.
He could have at least shut-up until AFTER the results of the black list are published… even if Cayman was not on the list before his rave… it is probably typed on there right now. Oh boy.
So what? If we aren’t already on this list then we will soon be on another list. For once I agree with the Govt position (although I have been preaching it for many years myself). We need to stand up to the bullies & say ‘no more’. Throw the hypocrisy back in their faces. Delaware, Luxumborg, Switzerland, London & Wall Street are the epicenters of money-laundering & tax evasion.
Did you ever notice that it is always the Big International Banks in the US & EU that keep getting fined $Billions and not the CI?
With the rise of eCurrency, all of this will be irrelevant within 10 years if not sooner. The PPM’s mis-guided policies have only succeeded in making it harder for CAYMANIANS to do legitimate business in their own country. Time to ‘arm’ ourselves with facts & stand our ground … come what may.
Bitcoin rose to it’s highest price ever around 11k per coin and then fell 18% back down to close to 9k in the period of one day
eCurrencies are not stable, anyone who says otherwise is fooling themselves or lying
Not to mention they have more vulnerabilities than conventional currencies and notes and used by less than savory individuals in the dark areas of the net to do despicable things
Alden Quixote taking on the world’s largest economies….
Paradise Paper trolls are on here. What a bunch of losers. Neo Marxist victimhood. Tainted by the post modern agenda. A commie is commie is a commie.
OOOOOOh i am shaking in my Blue swede shoes knowing that Alden the false pretender is Drawing a line please free to draw 2 lines infact 6 lines and make 2 Isosceles Triangles in the shape of a great big Dunce Cap for you and Mcfever da speaker to wear, that would surely frighten two Pesky Bourgeois Europeans and their protectionist tax schemes Bonjour mona ME!
Cayman is a place for the rich to avoid paying tax. That makes it a tax haven, however it is spun.
Or it is a jurisdiction that is tax neutral for business deals and transactions, the persons and entities involved are still legally obligated to pay taxes in their countries of origin, or incorporation.
Clearly you have no idea what you are talking about however
Oh but I do, I really do.
Companies pay taxes in the country they are registered.
Take GE for example, not a dime in us federal taxes. You really think the cayman islands don’t play a role in that ?
Don’t forget the tax loopholes in the US tax code that allow Corporations to pay a fraction of what they should, unless of course Cayman is to blame for writing the tax code too?
Tax-ception????
Everytime this guy opens his mouth he costs Caymanians more jobs. Maybe Alden should take some time off…like 3 years….we’ve earned it!
This a serious moment in Cayman’s history. I hope this is not the beginning of the end. If OECD also acts up in the near future and the US threatens to cut us off the payment system to prop up its own Delaware / Nevada business – add to that blockchain based contracts taking over – it is indeed lights out. No amount of Dart buildings will reverse the slide. I would welcome comments on how the above scenarios are unlikely.
Hahaha ohhh please Alden the great pretender those who gave or sold our rights out ages ago to get noticed can’t complain now when they have their little privileges taken from them
No more tax evasion?! Awesome! That means all the racist Republican Americans can go back home now!
See, since you can’t tolerate Caymanians and people of colour in our own country – and feel the need to tell us how to act, work, dance, worship, live life, and just about try to take over – what makes you stay? (Hhmmm).
If you can’t adapt to the culture and the people, then as they say – You ain’t got to go home, but you can’t stay here.
Oh I forgot, nobody else in the world wants your racist asses living around them!
See, when America realises that it only makes up 5% percent of the world’s population, and even most of that population is browning out now, then maybe you might be able to gain some perspective.
Commending Cayman for its continued transparency measures in the Financial Services sector.
Sorry to interrupt you while you’re playing the race card, but it’s the EU that’s after you, not the US. The US in general barely knows you exist and only because of John Grisham. Meanwhile Cayman seems to loooove my racist ass, so I guess I only need to avoid you to be happy.
The fact that you think both Democrats and Republicans don’t know that Cayman exists shows how long you’ve been out of touch with your own country. Living in our little Cayman hide-away since the 80’s have we?
So, you’ve been here in Cayman giving left-over charity from your tax-free gains for how long? Meanwhile, you could – excuse me, should – be giving that same “charity” in taxes to your own African-Americans, Hispanics and others. Caymanians are British, we have our own Mother Country, not to mention, we are a resilient people. We will be just fine. Trust me.
But I should say, because of money-hoarders like you, Caymanians, particularly those of colour and of little means can’t even get their own Caymanian politicians to hear about the abuse that Republicans in Cayman put them through at work, at school, and in general. Let me guess, those are the ones that love you? Yes, I thought so, ’cause it isn’t the average every day Caymanian, and if it is, you’ve managed to white-wash them very well … a little country music, a little whiskey, a little Jesus, and promises of the good life. How nice.
Just in case yur confused, it’s the democrats that fucked Cayman over with FATCA and the rest of the world. Thank democrats like Obama, along with Chris Dodd and Sarbanes. By the way, no one is opening up bank accounts in Cayman anymore as a result. *NO ONE*, All hedge funds are discourages to do so, and guess where they are opening? The USA.
What US State has an official ‘Barack Obama Day’? DELAWARE.
Which State did his VP Biden represent? DELAWARE.
Where is the biggest most secretive ‘Tax Haven’ located? DELAWARE.
Notice a trend here?
Obama didn’t do Cayman a thing. What he wants is for Republicans to pay their taxes at home so people who are black just like you (African Americans, Hispanics, etc.) can survive in their own country. What he also wants is Cayman Islands bankers to stop colluding with the wealthy 1%.
If Cayman needs investment, as most places do, then what CI government needs to do is diversify its investment resources – bring in money from a mixture of different sources. Stop encouraging investors from just racist America, get a little from various countries (but continue to make sure they pay their taxes at home). That way, one country can’t take over Cayman as is the case now.
And what Caymanians needs to do is learn to live more, from less. We’ve been trained to believe that success equals money, otherwise known as banking and tourism. Yet, how many Caymanians can say they’re truly happy? Barely a one. Success comes in many different shapes and forms. Find what makes you truly happy and do it, and hone it, because you’re going to need that skill after December 5th.
just admit it…..we are jurisdiction based on tax evasion.
all this nonsense about ‘financial services’ just makes us look dishonest.
What an idiotic comment. Sad troll.
It’s amazing that there are blabbermouths living in such close proximity to the legitimate industry that exists here, yet are so entirely out of touch with what that is, and has been for decades.
Proximity means close. Close proximity is redundant.
I’m guessing English is not ur first language?
“Jackass who dress as Lion must keep mouth shut”.
You are right. The thumbs down doesn’t say a thing about your statement, but clearly gives us an idea how ignorant people are.
Finally. I wholeheartedly agree. And it’s about time. I do not see this as a “threat” and how do we know that the US does the same due diligence?? I do not believe that they do.
The screenplay is already approved and we are cast again in the popular role of most belligerent non-cooperating Tax Haven. Taunting the EU to put us on the blacklist, will fit the narrative perfectly. Why would we risk economic ruin to do that?
Had the CIG spent a dime on professional Financial Industry PR (and media injunctions) for every dollar it spent on appeasements to the cruise lines over the last twenty years, there wouldn’t be any ongoing misunderstanding, and we wouldn’t have occasion to naively taunt the EU or OECD or Groupe d’action financière (GAFI/FATF) to “put us on their blacklist” as an opening negotiation tactic. It doesn’t matter if regulatory regimes have been tidied up, if nobody knows, or cares. Consequently, it continues to be very popular to demonize the Cayman Islands for perceived past wrongs, particularly because unfounded claims have long gone uncontested. For all we’ve done to comply over decades, we shouldn’t be volunteering for additional special victimization now. Exclusion (even temporarily) from international payments and settlements systems would lead to very serious cascading problems. That’s not something to bandy around like it doesn’t matter.
The advancement of Cryptocurrencies is a much bigger threat to our finance industry than any “paradise papers” leak.
And here I thought Donald Trump had a narcissistic personality. We have one here on our island that is just as bad, if not worse. Geezzzzz
It’s simply modern-day politics apparently
Someday the Cayman Islands will have a better government than the Turks and Caicos. Well, maybe………………………. ?
Might as well get rid of financial service industry..he’s already given all the jobs away…thanks for nuttin Alden
You mean he’s given away the jobs in the Financial Industry?
Like you could do that job?? LOL That’s rich! Just let me hire a school leaver off the streets and train them on the job to learn what others spends several years at uni learning…. LMFAO!!
Go for it. I’m sure you’d get invited for an interview.
I’m a Caymanian CPA. Go home you idiot! We really don’t want your kind…really just leave you pompous AH.
I’m sure the 15-20,000 caymanians working in the industry agree with you.
Why do these idiots never think about the 90%+ of Caymanians who do have jobs
Pull some more convenient statistics out of your arse
How funny, Cayman threatening the EU and the OECD. King Canute would be proud. Sounds like he is resigned to permanent blacklisting, which was pretty much sealed after Brexit and the Paradise Papers leak. Would the last person to leave please put the lights out.
where u going to go buddy? home?
Some of us will never leave. But we also know who will be the first. I wonder if they will take their status papers with them or will they just through them in the garbage. That my friend is why they are known as paper caymanians.
You may never leave, but without the money coming in, your kids will.
Whose ‘paper citizens’ will they become I wonder?
May the Premier be true to his word, and with God’s wisdom, act promptly.
Unison
#EverdayCaymankindRacism
You are an ass.. You are reaping the benefits of our beautiful island and making fun of us at the same time…I am sure there is someplace in the EU or the UK that you can find a rock to crawl under..