From The Office of the Cayman Islands Premier

“The Cayman Islands Government is deeply aggrieved by the acceptance of the UK Government today of an amendment to the Sanctions and Anti Money Laundering Bill in the House of Commons.” The Premier was referring to the Sanctions and Anti-Money Laundering Bill amendment that was accepted by the House of Commons on Tuesday, 1 May. It requires the British Overseas Territories, but not the Crown Dependencies, to establish public registers of beneficial ownership information by no later than 31 December 2020.

The Premier, The Hon Alden McLaughlin, said: “Imposition of legislation, through powers that date back to the colonial era, over and above the wishes of the democratically elected legislative bodies of the Overseas Territories represents a gross affront to the constitutional relationship we currently have with the United Kingdom. Further, imposing such an obligation on the Overseas Territories while exempting the Crown Dependencies discriminates unfairly against the Overseas Territories. This amendment is based solely on prejudice and a wilful misunderstanding of our current regulatory framework.”

The Minister for Financial Services, the Hon. Tara Rivers, added: “Even more unfortunate, today’s actions indicate that, for political expediency, the UK has chosen to ignore Cayman’s high level of ongoing cooperation which is embedded in our laws and international agreements. Over 100 tax authorities globally, including HMRC, and UK crime agencies already have access to information which states who owns what and how much in relation to Cayman companies. Indeed, verified beneficial ownership information on Cayman structures has been available to the UK’s legal, regulatory and tax authorities for more than 15 years, and our agreement on the sharing of information with the United Kingdom authorities is of such strength that we have committed to reporting within 24 hours, or within 1 hour in the case of a truly emergent situation. ”

Central public registers are not the global standard. Premier McLaughlin went on to state: “Since 2013 I have been completely clear that, when public registers become a global standard, the Cayman Islands will adopt them. The actions in the House of Commons today seeks to impose the UK’s own flawed system of unverified public registers upon the Overseas Territories by the end of 2020.”

The Premier also noted the apparent double standard adopted by the House of Commons during the debate on the same amendment bill, when it voted down an amendment to the UK’s Companies Act, which would have required due diligence on beneficial owners of UK companies in order to prevent money laundering.

The Government of the Cayman Islands is keeping all options on the table including a legal challenge to the amendment which violates accepted and conventional constitutional relationships between the UK and the Cayman Islands. The Cayman Islands has its own democratically elected government and is not represented in the UK Parliament. The actions of the House of Commons in seeking to legislate for the Cayman Islands amount to constitutional overreach and are reminiscent of the worst injustices of a bygone era of colonial despotism.”

From Cayman Islands Chamber of Commerce

Chamber expresses disappointment over UK public registry action

Paul Byles President (2018) 250xThe Chamber of Commerce Council has expressed disappointment over the United Kingdom’s (UK) recent action to force the Cayman Islands to implement a public beneficial ownership registry by 2020.

“We are concerned at the manner in which this was done. It does not reflect what we hoped to be a level of 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”, said Chamber President Paul Byles.

The Cayman Islands has signed dozens of tax information exchange agreements and its commitment to the OECD’s Common Reporting Standards, FATCA as well as ongoing cooperation and information exchange between regulatory and competent authorities in Cayman and many countries is proof that the jurisdiction has always taken its obligations to fight tax evasion and other financial crimes seriously.

But if the refusal to take Cayman’s actual commitments and regulatory framework into consideration is poor, the blatant disregard for the constitutional relationship between the UK and its territories is surely the most shameful part of this debacle.

“The 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 when many other countries are not currently required to do so,” said Mr. Byles.

That the UK would knowingly create an unlevel playing field for its territories based on misperception and politics is a major blow to the mutual trust purported to have existed.

The Chamber will now seek to support the Cayman Islands Government and the Ministry of Financial Services and other industry bodies in efforts to address this potentially damaging turn of events. We do hope that the Cayman Islands Government will make every effort to directly address what appears to be constitutional over-reach by the UK which demonstrates a blatant disregard for the potential negative economic impact of creating an unlevel playing field for its territories.