Cayman waiting on timeline for constitutional talks

| 28/06/2018 | 55 Comments

(CNS): Premier Alden McLaughlin told his colleagues in the Cayman Islands Legislative Assembly on Thursday that he has already requested a time frame from the British government for when constitutional talks can begin and said he had been assured that the dates would be settled soon. The decision to approach the UK about removing the final clause in the Cayman Islands Constitution was to prevent what the premier has said is “constitutional overreach” by the UK in future, following a vote in the House of Commons last month that has effectively imposed public beneficial ownership registers on the territories against their will. 

The premier has made it clear to the UK that not only does he oppose the issue of public registers but that he opposes the UK’s ability to impose its will on the Cayman Islands in the areas of domestic legislation.

“I have said many times since the amendment passed in the UK Parliament that the Cayman  Islands will not accept that the United Kingdom Parliament has any right to legislate for us when it comes to domestic matters that are devolved to local government,” he told the LA, as he updated his fellow representatives about the bipartisan move to renegotiate the Constitution. He said that the Cayman government was not “changing any laws or making any moves to adopt legislation to implement public registries of beneficial ownership”.

If by the 2020 deadline circumstances have not changed and the UK moves to an order-in-council to force open registers, the government has said it plans to fight all the way to the Privy Council if necessary, but in the meantime it is seeking a constitutional amendment.

Section 125 of the Constitution reads: “There is reserved to Her Majesty full power to make laws for the peace, order and good government of the Cayman Islands.” As well as seeking to remove all of this section, the premier said he wants it to be made clear that “the UK’s power over international affairs be confined to the enforcement and implementation of clear international obligations of the United Kingdom alone”, and so long as Cayman is not in breach of international standards, the power of internal self-governance is absolute. 

“This matter extends well beyond the issue of the position of public registers,” McLaughlin said, as he pointed to concerns he has repeatedly stated recently that, feeling emboldened, the UK parliament may decide to try and legislate for the territories anytime it disagrees with or wants them to do something.

I have said previously it is not just our financial industry that is at risk, but really, our very existence,” he warned.

This is behind the decision to both challenge any attempt to implement public registers when the time comes and to “insulate, as far as possible, the Cayman Islands from such further constitutional overreach,” the premier added.

He said he has made it clear to the British authorities, including Prime Minister Theresa May, that the exchange of notes and technical protocol that Cayman has worked on for nearly two years to deal with the question of beneficial ownership has been impaired.

“The exchange of notes allowed the exchange of information or the access to information in the Cayman Islands by law enforcement or tax regulatory authorities swiftly and in extreme cases in as little as two hours where there is an urgent issue. The whole premise of that arrangement — the agreement we reached with the UK Government — was that that would provide an alternative to the public registry regime,” he explained. “The actions of the Parliament have essentially vitiated that underlying agreement and we do not believe we have any further obligation to the UK Government under that arrangement.”

He said that the Cayman Islands Government will not stop cooperating with law enforcement and tax regulatory authorities in the UK and will continue to play an important role in the global fight against international crime and tax evasion. But he indicated that from now on, the cooperation would be as “a result of our willingness and desire to cooperate and not as a result of any obligation we have to the United Kingdom”.

McLaughlin said he had been in communication with the industry to keep them updated and that he would also inform the LA and the people when the timeline is set for the constitutional talks.

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Category: Business, Financial Services, Laws, Politics

Comments (55)

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  1. Anonymous says:

    Regarding the Osborne article, what is a little puzzling for me is why the Crown Dependencies are considered outside the EU, and therefore not obliged constitutionally to comply with the 5th AMLD, but the OTs are (not considering the U.K. Parliament’s directive).

    Perhaps someone could explain this, given that some posters are insisting that the OTs would have to comply anyway with the 5th AMLD.

    I also noted with interest all the flaws with the U.K. register that currently makes it all but useless.

    Someone was suggesting that Arden should simply have gone about quietly replicating a similarly useless register and forget about all the hullabaloo about the U.K. overreach.

    Personally, I am not comfortable with that position as it is not taking into consideration that it may normalize U.K. Parliament mandating for Cayman in ways that could conceivably be very harmful to Cayman in future. This action could set the precedent for others.

    As a result I support Alden’s response in principle.

  2. Anonymous says:

    Why aren’t the banks, law firms and investment groups not using their influence to solve this issue?

  3. Anonymous says:

    Businesses awaiting timeline for when to pack bags and gtfo.

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    • Anonymous says:

      Really 7:44 pm? Businesses are here because it is a good business proposition. I doubt very much they are packing their bags.

      And don’t sound do gleeful. We would all suffer if that happened — including you.

      But if you wished to pre-empt any sudden departures, I sense that it may not be necessarily a bad thing.

  4. Anonymous says:

    Caymanian politicians do nothing for Caymanian people.
    How hard is this to understand?
    Let Our Decent Guys Exist.

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    • Anonymous says:

      There is nowhere is the world where it is easier for natives to do welll and better than there objective talents allow than the Cayman Islands. If you are moaning the problem is your own mediocrity and your denial about it.

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      • Anonymous says:

        That rising tide lifts all boats my friend. There is nowhere in the world where it is easier for failures in their home countries to do well and better than their objective talents allow than the Cayman Islands either, because our law is easy to practise, expensive to buy, and indispensable to the global financial system. We have a good gig going here for everyone. No need to talk about ‘natives’. We aren’t exactly coming to work with lip plates.

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        • Anonymous says:

          It is easy for the second rate foreigner to earn first rate money because the local competition is often fourth rate.

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          • Observer says:

            6:59 am: your prejudice is not just showing it is glaringly obvious.

            We are a small population at varying points on the career and professional ladder —some at higher points of experience and qualifications than others.

            But it is distasteful and bigoted for you to classify the local sector of workforce as “often fourth rate”.

            Attitude, attitude, attitude!

            You are definitely part of the problem in the emerging disharmony and suspicion in our island community.

          • Anonymous says:

            Guess we should have picked better parents right?

          • Anonymous says:

            6.59am It is easy to spout your xenophobic opinion while posting as anonymous because to use your own name might just earn you a FIRST class seat out of here at the FIRST opportunity .

  5. anonymous says:

    I bet there is not one MLA that has made a true and accurate declaration in the Register of Interests, they hide their assets under the names of family relatives and/or corporate ownership. It would create a public furor if the public were to find out how much some of them are worth.Could this have any bearing on the concerns with the latest HMG initiative?.

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    • Anonymous says:

      The yet to be enacted, Standards in Public Life Law (2014) requires disclosure of interests – no MLAs want it enacted unless the voting public demands that they do it. Go figure.

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  6. Anonymous says:

    Bermuda gets it…why doesn’t Cayman?

    “The BOTs’ registers will need to show information broadly equivalent to that available on the people with significant control (PSC) register of UK companies”:

    http://www.osborneclarke.com/insights/public-beneficial-ownership-registers-coming-to-caymans-bvi-and-bermuda/

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  7. Anonymous says:

    quest for more local power eh? dont you think you have messed up your country enough? independence! can you immagine a politician in charge of the judiciary and policing??? Lord help us….????????

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    • Anonymous says:

      Exactly they just want to be able to do whatever they feel with no overseers, any kind of internal affairs or watchdogs so it’s “anything goes” in Cayman.

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    • Anonymous says:

      12:17 pm: Don’t actually hear anyone advocating independence at this time. But should we not be moving in that direction as an ultimate goal? Don’t we think that one day that might be possible or are we doomed to forever remain underlings?

  8. Doc. says:

    How come a “public beneficial ownership register” is necessary for the “peace, order and good government of the Cayman Islands”? Surely, the onus is on HMG to prove the necessity, and if it isn’t then the law is invalid.

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    • Anonymous says:

      HMG does not have to prove anything. Parliament has decided and parliament is supreme.

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      • Anonymous says:

        You are not talking about the UK here. You are talking about a British Overseas Territory with its own parliament. Do you understand that conflict?

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        • Jotnar says:

          Cayman has its own parliament but the UK retains the ability to revoke any law, veto any new law, pass whatever law they want and suspend parliament. Do you understand that?

          So in that light saying the UK has to prove what they want to do is to misunderstand the reality. They have the gun and the bullets, and the op wants the guy with gun to justify why they want to pull the trigger. Alden is trying to persuade them to take some of the billets out of the gun – limit the override to those issues affecting security or breach of international standards – but the only way of getting the complete sovereignty you refer to is to leave, as there is no way the UK is going to allow us to do whatever we want including violating any treaty obligations they sign up to or their foreign policy whether it’s on money laundering, beneficial ownership disclosure or even gay marriage whilst we remain a territory where they carry responsibility for our actions.

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        • Anonymous says:

          The clue here is in the word “British”

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      • Anonymous says:

        Is direct British rule like what the Turks and Caicos got being considered if Cayman refuses to comply with the latest British order in Parliament?

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    • Anonymous says:

      I agree this will be the main factor to be decided in 2019 if the UK implements into law the BO public register against Cayman’s wishes. UK will have to prove that this is a matter of “peace” in particular.

      Currently, it is accepted practice that the UK is implementing sanctions orders directly into Cayman law without local parliamentary approval. I am guessing the UK will draw parallels to this practice in making their argument.

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    • Anonymous says:

      The thing is, the UK is not blazing a fresh trail on international public disclosure, quite the opposite. They are just among many participating nations required to set up a public disclosure register as part of the EU’s Fourth and Fifth Anti-Money Laundering Directives. Our so-called leadership is absolutely clueless on the origin, time scale, and forces at work, which is unforgivable with so many resident “professionals” in this industry. Worst of all, they have sought no qualified opinion on what it is that we’ve been asked to replicate: a public “PSC register” by 2020. We’ve could have just quietly gone along with that, but Alden opted instead to start beating on the garbage cans and waking up the whole neighbourhood…

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      • Anonymous says:

        Cayman shouldn’t exceed the standard in the UK with their “PSC register”.

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        • Anonymous says:

          That’s what poster is saying. We aren’t being asked to…read the Bill, which points to UK Companies Law, which points to a PSC register standard. It’s not really that hard to follow.

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      • Anonymous says:

        12:07pm my friend you are much too sensible to be commenting on this site.

        Alden is doing the ‘whip up the natives” rounds straight from the Eastern Caribbean playbook, the home of his advisors.

        There is a solution here – he should get on with finding it and stop this carnival as he looks and sounds plain stupid!

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  9. West Bay Premier says:

    Do we understand why these certain things/laws were put in the Constitution between the UK and OT, over some 50 years ago ?

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  10. Anonymous says:

    Shouldn’t we first read and understand that the UK is being compelled by the EU Money Laundering Directive, and have themselves only partially complied in their expression of a public PSC register. They only ask the same of us, but, alas, our ill-equiped advisory group are too obsessed with populist knee-jerk and stubborn responses, to actually read the fine print like Bermuda and other BOTs have. It’s disadvantageous and self-limiting to confuse theatre over substance.

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    • Anonymous says:

      Silly argument you are making. How can the EU force us to do things that other EU members themselves are not doing. You sound like a UK supporter of the initiative. And an Anti Cayman person.

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      • Anonymous says:

        FACTS:

        Under AMLD4, the EU sought to combat money laundering and terrorist financing by imposing registration and customer due diligence requirements on “obliged entities,” which it defined as banks and other financial and credit institutions. It also called for the creation of central registers comprised of information about who owns companies operating in the EU and directed that these registers be accessible to national authorities and obliged entities. We are part of that, and you will note that our register goes live shortly.

        AMLD5, approved April 19 2018, contains several important provisions, including a proposed public registry of beneficial owners of all legal entities. The UK’s “Sanctions and Anti Money Laundering Bill” of May 1, 2018 passed these obligations along to BOTs…however, it defines “Beneficial Owners” as “Persons of Significant Control” (pursuant to companies laws left unchanged from previous AMLD4). The UK’s public register from 2016 is a PSC register, not a UBO register.

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    • Anonymous says:

      I agree with you that these developments are as a result of direct pressure from the EU on the Brexit negotiations.

      But, I however do not agree that the reaction by CIG is knee jerk. This UK threat has highlighted weaknesses in the wording of the constitution which now needs to be corrected. I believe the offending clause in the constitution is not precise and allows for wide interpretations by the UK to exercise their powers over Cayman. The upcoming negotiations on the constitution would force the UK to defend how exercising such powers falls within the allowable clause.

      The public register issue is a mere beneficiary of this process.

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      • Anonymous says:

        Unfortunately, this is really a group of male rectophobes preventing an order in council on gay marriage.

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      • Anonymous says:

        The EU AMLD4 and AMLD5 explicitly state that compliance bears no bearing on the ongoing Brexit negotiations. It has nothing to do with Brexit.

  11. Anonymous says:

    If this clause is removed the UK will still have absolute power to legislate for us. It will just give us a stronger hand in any fights like this one. Our Constitution is itself just an Order in Council, so removing the language from it that the UK may legislate for us, does not stop the UK legislating for us. It could replace our Constitution with a blank sheet of paper tomorrow. But it will satisfy local politicians and the appetite for a fight and need for a ‘win’, as well as signal constitutional advancement within the territorial framework. It’s a harmless and good thing to do.

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    • Anonymous says:

      Not at all. Emboldening territorial government to act above their limited station cannot be a good thing, especially when on looks at those currently sitting in the LA.

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      • Legal Eagle says:

        You and I will fundamentally disagree about the limited station of this particular territory. For many years Cayman has been second only to Bermuda in every metric a territory is measured by and if current trends hold we will surpass them in one very important metric – population – in a matter of years. Our finances are in much better health. Our financial services industry is better known and more interwoven into the global economy than theirs. In particular, ours benefits from a lack of protectionism that has resulted in a stronger bench of professionals to service that industry. We have leading capabilities in several areas that other territories in this region do not – consider our contribution to disaster management last hurricane season. We have been shaping the agenda for OT meetings. We have had capable leaders (if not legislators as a whole) who can go to the UK and get business done.

        Crucially, and no one living here who is from the UK seems to know or appreciate this: the Governor is not a member of Cabinet. The office has no vote; it only chairs the discussion, and only when practicable, meaning the Governor can say ‘I’m busy this morning, Premier you take the chair’. In fact that is what is happening right now: Cabinet is being held, chaired by the Premier, with the Deputy Governor attending as Acting Governor. In Bermuda the Premier and his/her Ministers have no Governor in the room with them at all. That is how they were able to bring those four Guantanamo detainees to Bermuda without the Governor/UK even knowing.

        We are in fact more advanced and more prominent in this family than you might think. We do have internal self-government – the only reason it isn’t total is because the language used for Bermuda’s constitution was drafted 50 years ago and Bermuda then used it against the UK in instances they did not like (most recently, those Guantanamo detainees), so they watered it down for all the other territories as and when they became more capable of running their own affairs. We are seeking to get closer to the Bermuda level. Whatever anyone wants to say of scandals and low intellects of officials and legislators and so on, this is an organised, self-funding, self-governing territory. Language inconsistent with that should not be in our Constitution.

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        • Anonymous says:

          The limited station is a definitional part of being a territory. Nothing more can be given short of going independent.

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          • Anonymous says:

            You don’t have much imagination. There are many arrangments short of independence that could restrain parliament.

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            • Anonymous says:

              No there is not. If a territory is a territory parliament must be supreme. That is a fundamental part of the foundation of the constitutional law of the sovereign state. The UK has to keep that as a red line for territories.

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          • Legal Eagle says:

            Which is why we are also the territory that best recognises we are more within the UK than without. We would rather have almost-full internal self government of a prominent territory than sovereignty over another couple of islands somewhere in the water. That doesn’t change the fact that we are ready to move up another step.

          • Legal Eagle says:

            Well that’s just plain wrong. Associated statehood is just one example of an in-between level.

  12. Tired a de nonsense says:

    Hana west ay Premier, why do you insist on more information, when it is obvious ya. Capacity fe understNding na right. Can’t you read, can’t you hear? . How many ratted times ya have to be told the process Master. Look Breda read my lips “sush”with ya nonsense eh.

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    • West Bay Premier says:

      Why you’re tired a de nonsense, is because you can’t see/understand the “sense “. I have no more time to waste talking to nonsense.

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  13. Anonymous says:

    The talks can start the day after the public beneficial register goes public.

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    • West Bay Premier says:

      Anonymous 1:30am , I think that almost every Citizen and Caymanian don’t see and understand what the Premier is about to attempt to do .. Do you know that him alone could lead the Islands into INDEPENDENCE . Especially when he’s the smartest one of the 19 of them lawmakers .

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      • Anonymous says:

        Rubbish from all perspectives 9:53 am. Obviously too early for your brain:1.Alden has no intention to lead us into independence; 2. He does not have the powers to singlehandedly take the Cayman Islands into independence; and 3. while he is a bright man and while the other Members of the Legislature may not all have the same backgrounds, experience, or education, we should never assume that they are not as intelligent or capable.

  14. West Bay Premier says:

    I think it sounds like the Premier wants to take away the powers of the Governor, and change the constitution to where the UK would have very little to say with the governance and legislation of laws of the Islands.
    I think it is very scary that him one is attempting to do such things ,and shouldn’t be permitted.
    I believe that he should explain these steps in which he is attempting to the people of the Islands in plain simple language before he do anything .

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