Cayman under new EU black-list threat
Premier Alden McLaughlin and Financial Services Minister Tara Rivers talks to UK Chancellor Philip Hammond
(CNS): As the UK government moves towards trade talks with the European Union as part of the Brexit negotiations, the British Overseas Territories, including Cayman, could be used as leverage and may be placed on the black-list that they recently avoided, according to a report in the Independent Sunday. Brussels is planning to demand that the UK reveals information on how its territories operate as tax havens, and if the British government refuses to comply, the territories may be put on the black list and face sanctions.
When the EU announced its latest black-list of countries it believes are tax havens, the Cayman Islands and other territories were placed on a grey-list based on agreements to meet certain requirements of the EU.
Officials here have still not explained what Cayman had committed to in order to avoid the actual black-list. However, that may be less relevant than the part the BOTs may now play as pawns in the EU exit talks.
The Cayman Islands government has been lobbying the UK over how ‘Brexit’ will impact the territories and have been given assurances that the British officials negotiating the divorce from the EU will not abandon them. But that, according to this Independent report, may be exactly what is about to happen.
The reporting by Joe Watts and Andrew Grice states that the European Commission will soon review whether British territories previously left off the tax haven black-list should be added when the talks about the UK’s trade deal with the EU begin. Although European leaders have denied that the blacklisting of offshore financial centres and the Brexit talks are in any way connected, the report says that separate Brussels-based sources told The Independent that the territories “will come into play”.
“One official made clear the EU would ‘go after’ them, while another said the UK government must ask itself if it wants to fly in the face of British public opinion on tax avoidance,” the article states.
Some of the BOTs escaped the blacklist because they were hit by hurricanes this summer and are still recovering, but they remain at risk. Other territories, such as Cayman, were not listed because of their as yet unexplained commitment to address “the concerns relating to economic substance” this year.
Officials said that territories impacted by the hurricanes, such as Anguilla, the British Virgin Islands and the Turks and Caicos Islands, will be re-screened in the Spring and may end up on the black-list, while Bermuda, the Cayman Islands, Guernsey, the Isle of Man and Jersey will be reviewed later in the year.
While it has been suggested that Bermuda will get a clean bill of health, it is not clear what the EU has in store for Cayman and whether the UK will be in a position to protect the jurisdiction from any adverse sanctions on the financial sector.
European parliamentarians have spoken publicly about the need to avoid trade deals with countries who fail to assist in the fight against tax avoidance, and some EU nations, such as the Netherlands, have made it clear they will not support any deal with the UK that does not address the tax haven issue.
Britain has been the main defence against blacklisting, and despite claims by the EU that the black-list and Brexit are separate, once the UK is outside the EU, Europe will have a clearer path to put greater pressure on places they see as facilitating tax avoidance.
With public opinion in the UK also heavily against conglomerates and the wealthy elite using schemes to get out of paying what people believe is due to the Treasury, the UK may be less likely to protect the territories if they stand in the way of securing the favourable trade deal Downing Street is desperate to secure.
Chair of the Treasury Select Committee Nicky Morgan has said if the EU thinks the trade talks are not going well, they will use the territories. “We certainly don’t want our trade talks to be jeopardised by the action or lack of action by an overseas territory,” she stated.
CNS has contacted the financial services ministry for comment and is awaiting a response.
Category: Business, Financial Services
Oh Yes once Sir Alden has found out his giving away of our little Budget surplus is not going to pay the dividends he expected? Our dearest mother has come up with some ridiculous EU mumbo Jumbo to get out of taking care of its obligations to its BOTC yet again ! It has only 13 billion pounds slated to ease the conscience in “Developing Countries” in some payback scheme to fight “Poverty” wow now aint that convenient . Oooooh yeah aint nothing like a big old threat of a Blacklist to remind us to stop complaining about the privileges we have and the opportunities of bailing out mother and getting absolutely nothing in return but a hoards of her unemployed and a few empire medals to pin on our little jackets.
Want to explain how we have bailed out Mother so we can expect anything in return? Not aware of us providing the UK with a single dollar.
the EU are just a bunch of big thugs pushing the UK till it breaks and mend to its will, if they cant get what they want they will make it hell for us. The EU will bully whoever they want till they give in to what they want, i say fight on UK.
Time doesn’t change people, there are those who still believe that they should be the only one to have wealth; even if they found it in someone else’s front yard.
Someone should put a travel ban on flights coming out all EU countries. Too many bad apples over there.
The EU is like a PoS. Cayman need to stop worrying about these unelected bureaucrats in Brussels. The EU is about to implode, just watch what happens to this crappy union.
Decision time soon come. Independence or proper integration with UK. Brits don’t care either way but the current situation is untenable…make a decision.
You cannot carry on pretending you are a Government which is really nothing more than a UK parish council. The voting pool is too small, too insular and too related to each other.
Slap them in the face with a book on Cayman’s history and remind these a$$holes why Grand Cayman became tax free!
I don’t think there is any actual proof of that particular story,
the wreck happened but there is no record of any royalty on board or any supposed promise from the then sovereign
It is peculiar however, I personally believe they just didn’t feel like we were worth the time of day remember for most of Cayman’s history there were less than 10,000 people (way less) and most of those people weren’t exactly rolling in dough so to speak, probably made no difference taxing us or not taxing us so they just opted not to.
In my opinion a slow introduction of a 2-3% sales tax or income tax would ease our dependence on tourism and work permits, mind you they would also have to lower duties on things so that the cost of living would fall but I think that it would work well with a relatively minor little change in day to day costs
Cayman currently has all of it’s eggs in two baskets which is very unsettling, if we trip, there goes all of our metaphorical eggs
The recent reduction in the USA corporate tax rate makes the USA much more competitive with other tax venues. However, the Cayman Islands can still remain in play so long as the island maintains a culture and legal system compatable with the Anglosphere. Key to this will be limiting the admission of persons from places with incompatable cultures. Cayman should emulate Bermuda Switzerland and Singapore and exclude undesireables. If they do so, the future is bright regardless of what the USA or the EU does
Cayman is on the EU’s “$hithole” hole country’s list. and Britain is the enabler. As long as politicians are involved it will always be the same..It’s ok to do it in London but not in Cayman…ugh!
Please stop the ankle grabbing and stand up to these financial bullies. There is NO appeasing them, they will only stop and be happy once this financial industry collapses.
these are Euro economic fascists that will keep eroding with business killing policies until this industry until it is no more.
Believe it or not, a lot of people will be happy when the financial industry collapses.
Yes.. only problem is C.I.G revenue will have to be based on customs duty then, if they relax the prohibition on marital aids and wedding dresses , we will all be stepping high towards 2020. Oops, almost neglected to include the Caviar.
At their own peril
Better than being on a black list for funding terrorist organisations.
Better than I have a toothache.
The EU has much bigger problems to address like the homegrown terrorists who are harboured and supported by extremist in the $&€&hole we here in the west call the European Union.
What the EU should really be concerned about is London, unfettered by EU regs, becoming the offshore jurisdiction of choice for European money (businesses and individuals). While Cayman cannot dodge the ‘we big you small’ blacklists, the idea that the EU will stamp out the big offshore jurisdictions – New York, London, Macau? – is laughable and our best defence is, as always, ‘we’re just doing what they’re doing’ thus letting ‘them’ – London, Macau, OECD – fight our fight for us.
New York and London are not offshore jurisdictions for heavens sake. The EU is not going to blacklist either of them ever. They are also the source and ultimate home of about 90% of your business so you might want to talk nice about them.
Mother do you think they’ll drop the bomb?
😉
Diogenes
With our alarm system, we’ll never know what hit us. Which I am okay with.
But we have to be very careful today because some people would work both sides, the employer and the competitor .
Yes Cayman when the chips are down on the negotiating table you always sell the natives first, standard procedure!
Awww, sad native.
Nation comes before regions.
Sign whatever they put in front of you, then run the system with the same inefficiency, incompetence, and opacity as everything else in Cayman. Problem solved.
This shows the Premier didn’t make the EU understand anything the first time . That’s why in the above photo that Alden look like he might be serious, and Tara look like she might be laughing . Bad team for negotiating .
Don’t send clowns to the adult table then
A clown in a suit is still a clown,
Education is in the shitter and they swapped her out and now shes running Financial Services, honestly I don’t know which is worse
Britain is in a complete mess after the idiotic Brexit vote and the BOTs will be, and ought to be, sacrificed as part of the greater national need to minimise national harm.
Brexit may save you. TheEU was going to screw you big league.
Sip dat Kool-aid.
What are the sanctions that Cayman is afraid of. Why don’t all the grays and blacks get together and form a common front instead of fighting with each other over which Island or country is the best financial center.
The other people on the gray and blacklists are our competitors, and we don’t exactly have an office for foreign relations and the like our government is limited in scope under the current constitution
What are we afraid of. Are you kidding. Think back a few months. What will happen when the banks here cant get US. You cant spend CI in Miami.
In my personal experience the flow of thousands of my USA dollars has been from my pocket in the USA south to the Cayman Islands. I’m sure that more than a few landed in Cayman banks and were spent in Miami by Caymanians!
Unless you brought cash the transaction has to be cleared thru some US bank and that is where they got ya.
The only way to defeat a Bully is to beat him at his own game.
Since these EU poltiticians want us to be ‘Transparent’ with client information, why don’t we start by divulging the holdings and connections that ALL of the the members of the EU parliment have in the ‘OT Tax Havens’. I bet we’ll hear a different tune from them very quickly indeed!
Richard , I agree that you have to stand up to the bully and beat them at their own game . I think that the best thing for Alden to do is to get all of the EU Members names who has Investment Accounts in the Cayman Islands , Ask them all in the EU meeting , why are they Investing their money in the Cayman Islands ? Then ask them after you have got honest answers. Why should Cayman be considered for any blacklist or greylist ? But Alden and Tara need to stand up to the EU and no laughing at the table and put on a Nasty Pelosi face .
What has Bermuda done to get a clean bill of health? Cayman needs to follow the Bermuda example, whatever it is. Cayman cannot afford to be on the EU blacklist as being on the list will impact our financial services sector considerably.
As adopters of CRS, we have the legal authority to annul any tax-based blacklist or sanctions via the CJEU in Luxembourg, and sue for damages. We should make preliminary legal investigations in that regard, in preparation for inflexible EU politicians that may be unwilling to read and/or adapt to new realities. We should tell them we are doing this and that they will be on the hook, not us. We don’t have anything to loose. Let their continuing tantrums serve as a reminder that Cayman Finance and our Cabinet needs to be a full step or two in advance of these challenges.
ha ha!
big talk
Racist list.
Build a wall?
Everything is racist. Get over it.
Wotch u talking about willis?? I tought dey luw us in Europa ?? according to da PPM puppet masters and financial gurus and wizards. We have sign every piece of EU piece of Tax toilet paper and passed every piece of see through legislation Mama has told us to pass. what more do these SOB’s want??? Wha goin on Alden??? i cant bank my Bitch Coins now what more are you going to give these colonial Bastards our conch and lobster from the environental zone .I thought you took care of this PPM. Its time you tell Mama Homey dont play Dat! Or it is what we always knew the our so called government is What Connor was in Mobil “NUTTIN”
How sensible! We should start tomorrow, or whenever.
It’s a bit embarrassing that certain EU and UK politicians and media (with a duty to report facts) still cling to the popular notion of continuing “Tax Haven” legacy in regards to historical policy matters. They must be unfamiliar with the Common Reporting Standard (CRS) devised by the OECD/G20 in 2014 for Transparency and Exchange of Information for Tax Purposes.
There is simply no persuasive argument that the Cayman Islands in 2018, as an early adopter of CRS, continues to be a “Tax Haven” in the historical sense. The Cayman Islands affords no special amnesty from corporate or personal taxes that may be due elsewhere. Say it loud, and say it proud.
Please refer them to this link before they embarrass themselves:
http://www.oecd.org/tax/automatic-exchange/common-reporting-standard/
If the EU put us on a blacklist, we should answer by taking them to the European Court of Justice (ECJ) in Luxembourg.
Sorry, but you must know Cayman’s legal finance business is 100% tax related. The illegal business is another matter but is not what it was. Good luck with the ECJ, they will be so sympathetic.
100% tax related? Utterly clueless.
Time for Cayman to schedule discussions on becoming an Independent country in the next twenty years or advancing to a better constitutional position like Bermuda which has a greater degree of self governance. Learn from the mistakes made by the Bahamas, Jamaica, Barbados, Trinidad and all the former British colonies in the caribbean.
The UK will not protect Cayman if it does not suit the long term best interests of the UK. Time for Cayman to grow up and understand that self governance is the only solution to preserve your success and financial services industry.
How would self-governance stop Cayman being blacklisted?
“self governance is the only solution to preserve your success and financial services industry”…like all those highly successful former British colonies you earlier told us to learn from the mistakes of, you mean?
And why exactly would / should the UK ‘protect’ us? We requested and have been granted ‘Self determination’. This means we set our own path and make our own decisions. IF we want / need help, then it is up to us to seek it.
Fear not folks Premier Alden will sign whatever they place in front of him and continue to sell out the Cayman Islands if it helps his personal agenda.
Oh learned one, please explain what you know about Big Al’s the rest of us are like
mushrooms, you know kept in the dark and fed horse manure. Do explain oh learned one we must know now.
The Premier is the same guy that cut a sweet heart deal with Big Mac in 2017 after telling the country for over a decade that Big Mac is bad for the country and not to be trusted as he’d embarrass Cayman. The irony is Big Mac now props up the Premier with his UDP 3 as Speaker with all the perks and trimmings. The Personal agendas has always been more power and now to secure a 3rd term as Premier after they amend the constitution which will be championed by Big Mac
We have to face the fact that we are in a battle we cannot win. The only natural resource we have a small strip of white sand and over development is destroying that.
oh sweet jesus, this is not good at all.
Inevitable result of the Brexit vote.
Because before Brexit we were left alone…
Really, the UK lobbied hard for the BOTs not to be blacklisted. There is no-one to defend them now in Brussels.