Cayman Finance floats option to contentious bills

| 10/11/2020 | 29 Comments

(CNS): Cayman Finance has proposed an alternative approach to the amendments government plans to make to several laws in order to address compliance issues regarding transparency of accounting records for offshore service providers. The list of bills stirred up controversy with stakeholders when they were circulated to industry players, raising alarm that they posed a threat to corporate service providers.

In October the Cayman Islands Company Managers Association submitted comment to government about the proposals, in which they said the proposed amendments were completely unnecessary and would lead to a loss of business. Some members were also worried that government might not listen to the industry’s concerns, regardless of the consultation.

Johann Moxam, Partner at Lainston International Management, a corporate service firm, described the consultation as a charade, despite the serious threat to the sector posed by the purposed legislative amendments.

The consultation had been due to close in October but was extended to last week. According to documents submitted to government on 6 November by Cayman Finance, the body representing the wider offshore industry, they too had serious concerns about the proposals. As a result the association came up with an alternative proposal.

The financial experts said in their submission that it was possible to comply with the Global Forum’s recommendations for an effective system of oversight on accounting information with potentially less burden being imposed upon the jurisdiction and its service providers than the proposed amendments to eight pieces of key legislation.

Cayman Finance said the sector was worried that the government’s proposals, which they described as “out of proportion” as they stood, would place an unacceptable burden on corporate service providers, risk a loss of competitiveness for the jurisdiction at a time when it is dealing with a great deal of regulatory change, and that the vague language of the amendments would pose significant compliance problems.

The proposals were “overly burdensome, fraught with uncertainty and disproportionate”, Cayman Finance said, adding that there were ways to address the issue without forcing every offshore entity to have accounts held here.

Instead the association submitted a simpler proposal to include an obligation in all relevant laws for companies to “(a) keep proper books of account and (b) where books of account are maintained outside the Cayman Islands, comply with any request from the Tax Information Authority (TIA)”, with confirmations to be included in annual returns

Cayman Finance suggested an administrative fine and giving the registrar power to strike off entities that don’t comply. The organisation did not submit specific drafting suggestions but offered to give more details if the finance ministry, which was seeking the input, wanted.

“However, if the Ministry considers that the best way forward for the jurisdiction will be to require the maintenance of some kind of accounting information in the Cayman Islands, Cayman Finance would strongly suggest that further industry consultation take place in relation to the appropriate form and content of any such required information,” the association stated in its written submissions.

See submissions in CNS Library.

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Category: Business, Financial Services, Laws, Politics

Comments (29)

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  1. Anonymous says:

    The Minister and her staff are so over their heads. But the Premier needs to keep her close. Lest we forget it is a coalition government which lost 3 members since 2017. She is a necessary evil even if she completely destroys our financial industry.

  2. Anonymous says:

    Perhaps they should get Chris Saunders opinion. According to CMR he is an expert on all this compliance stuff.

  3. Anonymous says:

    Government needs to stop trying to play hero – we must take care of our own first – the “person(s)” in s.., h… islands that are advising him must stop, Government must think for themselves. AG and the Finance Committee must bring the hammer on these losers, before it’s too late , ….. I hope it’s not already too late,

    We need to STOP bringing people in and we must start sending the ones that are depending on us HOME!!!! This shit that Government is doing is not balancing out. For God sake i am begging wake up ad do the right thing.

    • Anonymous says:

      Clearly the esteemed member of the ‘Ouse ooo as been vocal in observing Correk procedure will be providing advice on compliance matters , being one of our own.

  4. Anonymous says:

    Now can the DITC please release the example Economic Substance Returns, especially those of Holding Companies. We have over 3,000 returns to fill before 31 December and still don not know what is needed and around 30 working days left.
    That is over 100 returns a day, if they released them now, with $5,000 late penalties, this will murder Small CSP’s.
    The lack of uncertainty and guidance is causing a huge amount of risk

  5. Anonymous says:

    How rich it is for the CIG to high-handedly propose additional disclosure rules for private company accounting with transparency and publication, while ironically dismissing their existent and long-standing public entity obligations. We can’t even review the agreements they are binding us to. Too <> to be conscious of the dichotomy. The CFATF report sighted government corruption and opacity in their 11 central jurisdiction critiques on page one of their executive summary. Somebody hand them a mirror.

  6. Anonymous says:

    This is what happens when persons in high places refuse to liaise with others who has the knowledge. As my granny used to say ” two heads better than one, even if it’s a cow head”

    • Anonymous says:

      Is that 2 heads are better than 1 cow’s head?
      1 human and 1 cow’s head are better than 1 human head?

      Maybe wise ol granny was just giving you the recipe for goat’s head soup.

      • Anonymous says:

        You must be the goat’s head in the soup then. Not using it anyway.

        Always easier to block someone else’s shot then learn to make your own. Sit down please, ma’am.

  7. Anonymous says:

    Big party planed. Dinner menu includes roasted golden goose.

  8. Cruyff says:

    Politics has entered the financial industry during the silly season. This is not going to be good for anyone.

    • Anonymous says:

      It has always been there understand how certain laws are passed or presented including the Legal Practioners Bill which has now been renamed. Same dog puppy

  9. Anonymous says:

    At last a bit of sense

  10. Anonymous says:

    CF has a pulse?

  11. Anonymous says:

    Thank you Johann Moxam for stepping up and putting the spotlight of this unnecessary madness

  12. Res Ipsa Loquitur says:

    This Government is officially screwed if Cayman Finance is now going against them.

  13. Anonymous says:

    Please resign now from all politics Tara

  14. Anonymous says:

    Looks like Moxam and the company managers position has been endorsed by cayman finance. Will government listen to reason?

    • Chris Johnson says:

      Yes but where was the support from the other associations such as the accounting society, the legal practitioners, the bankers association etc etc.
      Kudos to Paul Simon of the company managers association for driving this ably supported by Johann Moxam. However it is best to have strength in numbers. The associations need get together.

      • Anonymous says:

        Chris, the accounting and law societies is still counting how much money they are going to make from the Private Funds Law. For the accountants it would be like turkeys voting Christmas.

      • Anonymous says:

        Other associations fight the good fight but neither CIG, the Ministry or CIMA ever dane to listen, take on board and certainly never implement industry’s well founded concerns.

        CIMA has been allowed to become way too powerful and they needs to have their wings clipped and balance restored to the industry/regulatory continuum.

        CIG and the Ministry need to be part of the solution and rebalancing. Bottomless pits of (yes!!!) civil/public service and government money allow CIMA to keep recruiting people and adding resources who have no clue how the Cayman Islands financial services success story came to be and with every intent in trapping us into a EU style regulatory orbit……


  15. Anonymous says:

    Thank you Cayman Company Managers Association and Cayman Finance for trying to bring sense to complete nonsense. Tara Rivers is hopeless as minister of financial services no need for these amendments.

    • Anonymous says:

      Tara is a continuous train wreck of an FS Minister. How many more things can she make a mess of?

      • Anonymous says:

        Don’t let ‘em make any movies!!! If you think projects overrun now, it will be the last one Cayman ever complete.

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