Cayman Finance remains calm, Chamber outraged
Jude Scott, CEO Cayman Finance
(CNS): Jude Scott, the CEO of Cayman Finance, has responded relatively calmly to the vote in the UK parliament yesterday, which will see the British government impose a public beneficial owners register on the Cayman Islands, as he pointed to the two-year process, during which time the dialogue with the UK would continue. Meanwhile, Chamber of Commerce President Paul Byles described it as a “shameful debacle” and a “blatant disregard for the constitutional relationship between the UK and its territories”.
The head of Cayman Finance, whose members will all be impacted, said it was an “unjustifiable encroachment into matters within Cayman’s domestic competence”, but he appeared to indicate that there was still much to discuss before Cayman would be forced to go it alone with a public beneficial ownership registry.
“Cayman’s existing verified ownership regime remains in force – and remains superior to existing ownership regimes in the UK and around the world. This vote simply continues the legislative process for potentially requiring changes to Cayman’s ownership regime more than two years from now, during which time there will still be on-going dialogue with the UK,” Scott explained, as he made it clear the financial services industry would also support the Cayman Islands Government as it assesses the options.
“The House vote is a vain attempt to fight global problems like corruption and tax evasion by unfairly discriminating against a few jurisdictions – requiring public registers from overseas territories but not crown dependencies, for example. Global problems require global solutions and standards that apply to all jurisdictions,” Scott said, before pointing out that the regime here is recognised as superior to the open register in the UK.
“The Cayman Islands also has had a world class verified ownership regime in place for more than 15 years whereas only 11 out of 28 EU countries have a register at all. For all of those reasons, the OECD’s Global Forum in 2017 assessed our jurisdiction to be ‘largely compliant’ with the international standard for transparency and exchange of information, the same rating given Canada and Australia.”
He pointed out that the Financial Action Task Force has recognised that verifiable private registers like Cayman’s which are searchable by appropriate tax authorities and law enforcement agencies remain the more effective approach.
“Recent reporting about multiple defects in the UK’s own current public, but unverified, register system proved the point,” he said, before criticising the British politicians who supported the amendment to the law but rejected cleaning up its own company register.
“The House demonstrated a remarkable display of double standards by voting down a requirement to perform basic anti-money laundering checks on the hundreds of thousands of UK companies formed annually through Companies House in the UK,” Scott said. However, he noted, “We are a long way from any change in Cayman’s existing verified ownership regime.”
He said that he hoped the UK Government’s explicit assurance that it would work with the Cayman Islands in shaping any implementation of this legislation would respect the Cayman’s constitutional rights and work with Cayman to protect its interests.
“Cayman Finance will support the Cayman Islands Government in ensuring that the UK delivers on these assurances in any proposals to make changes to the Cayman Islands’ globally endorsed existing anti-money laundering regime and its highly successful, well-regulated and globally significant financial services industry.”
Chamber President Byles said the move had broken the trust between the UK and its territories. “The UK’s reserve powers are meant for extreme situations and the idea of using it to force the Cayman Islands to implement a standard that the UK itself has admitted is not global will likely be a serious blow to trust between our industry and the UK,” he said.
He added that the British parliament “has shown no regard for the potential negative economic impact of requiring the territories to implement public registries ahead of this being a global standard”.
He accused the UK of knowingly creating “an unlevel playing field for its territories based on misperception and politics”, as he offered the support of the Chamber to the government in its efforts “to address this potentially damaging turn of events”.
Meanwhile, Anthony Travers, from the local law firm Travers Thorp Alberga and former chairman of the Board of Cayman Finance, who remains an outspoken representative of the offshore sector, told the specialist industry media International Investment that it was extraordinary that the precarious nature of the Conservative majority in the UK had resulted in an extra-territorial legislative proposal capable of causing significant harm to the Cayman Islands with no legitimate reason.
“Our existing legislation provides for law enforcement and tax authorities to access the beneficial ownership registers of Cayman Islands companies, partnerships and trusts. No good reason has been established for extending that right to the public at large,” he said. “The Cayman Islands Government is now under a clear obligation to challenge any attempt to extend this United Kingdom initiative, by way of an Order in Council to the Cayman Islands.”
Travers added that any attempt to make the ownership of Cayman entities available to the public contradicts the protection in the Cayman Islands Constitution of the legitimate right to privacy.
“Given the confusion on both points exhibited by the United Kingdom legislators, the Cayman Islands government will, no doubt, need to resort to litigation to establish both points with certainty,” the lawyer said.
Related article: Opposition: Lack of plan makes UK move worse
Category: Business, Financial Services
I have read a lot of ignorant comments before, but none like on this article. This is a storm about nothing. The reality is that anyone doing business with anyone has to do DD/ KYC up the yin yang on each other, and this could make that process easier. If you wished to hide who you are, that boat sailed long ago from Cayman. I don’t know about you, but I got better things to do than trying to nose into who owns what, unless I need to.
With you right up to the end. Sadly there are many bitter weird people who love nothing more than nosing into other people’s business.
Completely miss the point. This is not about you knowing what the person you are going to do business with have. This is about a kid in the school of your son looking at what you have to decide if they should be friends or date; or a kidnapper figuring out if it makes sense to go for your family, which hopefully will never happen in Cayman but does happen in other parts of the world where many of the people using Cayman products still live.
this is eerily similar to the sentiments expressed by the first western settlers of what is now the USA. “Taxation with no representation”
Anyway, on the bright side… those who have invested in the Isle of Man will be quite happy with this news.
Sadly, stories like this aren’t helping us – https://www.mirror.co.uk/news/politics/millionaire-tory-mp-defended-tax-12471243
Why didn’t this upper class twit just keep his mouth shut?
Elections In the U.K , these are all vote getting talking points , and mostly BS !
i am a native….but the day Cayman Islands go indepebdent, i am leaving! ??
Please ensure that the UK clearly understands that if this “move” come to bear and a significant portion of the OT economies disappears, all of the OT’s will be coming for annual aid required to cover this short fall. Most of the OT’s receive very little, if any, annual aid at present.
Suspect in the case of Cayman the U.K. Govt will tell CIG to impose personal income taxes, and impose property taxes.
But the ordinary UK citizen thinks the UK Government pays for everything in the Overseas Territories, which in reality it does not.
No they just think that the BOTs that are OFCs are parasites, which in reality they are.
The UK is becoming more and more like middle eastern terrorist countries. Careful UK, the rest of the world is watching, especially you know who.
WOW. Of course average class citizens do not realize what this means for the islands. Two year dialogue. Ha. Be realistic with the public. The government has worked hard these past 10-15 years to focus on wealth and financial attractiveness. The UK is obvious of this and will milk it. Who really will try to dissuade the U.K.? Not the government? Members are already financially stable. Watch within those two years how this will ‘trickle’ over the brim of the tea cup. This is the U.K we are talking about. Wake up Cayman and educate yourselves. Government in the C.I. also will change in two years. How does that shake the mango tree, eh?!??.
What?!?!
Will this cause all the Brits to go home and pay U.K. tax’s. Sounds like what they want.
Grocers’ apostrophe’s should definitely be taxed.
Blatant racism! The Crown dependencies are predominantly White while the Overseas Territories are predominantly Black or mixed. This is a classic case of race discrimination
Yawn. We just don’t care about your victim mentality.
It really isn’t. It’s a classic case of different constitutional relationships. But don’t let that chip on your shoulder get in the way of a good rant.
Scott is right, Caymans detailed, verified closed system is superior to the UK system. So we just adopt their garbage self certified public system and largely ignore it, like they do… job done
Goodness, the UK seems adamant to destroy our financial services industry.
They won’t stop until The colonialists can control the natives again. It’s a shame in their eyes that we have succeeded.
And the natives control the expats that actually do work
Since this will cause companies to move back on shore I guess you expats who seem to hate Cayman will be glad to move back home. Like they say behind every dark cloud there is a silver lineing
I thought this was the dream of Caymanian, to have expats leave the shores so Caymanians can get jobs cause of discrimination against them. Not so?
That’s a weird take on things…
Companies will not go back home. They will go places like the Cook Islands and other jurisdictions not ruled by the home country. Just think if we only lost ten per cent of the financial business and the ramifications. Less income in financial services, less employees, less supermarket and hardware sales and empty rentable properties.
Cayman needs a think tank to prepare for all of this.
But these Caymanians on CNS cuss expats everyday. I don’t think Caymanians know lucky they are. They bitch when a few get PR and Status , not fully understanding whar an easy life they have