(L-R) Premier Alden McLaughlin, Financial Services Minister Wayne Panton and Cayman Finance CEO Jude Scott
GEORGETOWN, Cayman Islands (CNS) -- The Cayman Islands government has announced plans to enter into agreements, similar to the one it has with the UK, for the exchange of beneficial ownership information with other jurisdictions and to amend the territory’s notorious secrecy law.
After just two days in London, on the eve of the UK’s anti-corruption summit, Premier Alden McLaughlin has said that Cayman will join the initiative to develop a global standard for sharing with authorities the details of the entities registered there.
Keen to stress the years of cooperation and what the Cayman Islands government claims are levels of transparency that exceed those of the onshore jurisdictions, the financial services ministry released a statement outlining the latest developments, as pressure mounts on Cayman and other jurisdictions considered to be tax havens.
The statement revealed that the premier has told the British Treasury that, in order to foster greater collaboration between law enforcement and tax authorities in the fight against corruption and tax evasion, it is welcoming jurisdictions that are participating in the initiative for the exchange of beneficial ownership information to enter into agreements with Cayman that are similar to the exchange of notes currently in place with the UK.
“For many years Cayman has had in place a strong anti-corruption framework, as evidenced by the extension in 2010 of the OECD Anti-Bribery Convention, and the expected extension of the UN Convention against Corruption, for which Cayman was favourably assessed in 2014,” he said in the release issued worldwide.
McLaughlin also revealed his government plans to replace the controversial Confidential Relationships (Preservation) Law, described as the country’s ‘secrecy law’, and replace it with the Confidential Information Disclosure Law, which he said would better clarify the mechanisms through which confidential information may be shared with appropriate authorities.
However, McLaughlin stated that privacy was a basic human right and said new data protection legislation would be introduced in Cayman in September on a par with laws across the European Union.
Listing Cayman’s historical role in “global transparency”, from tax information exchange agreements to the most recent Common Reporting Standard, McLaughlin defended Cayman’s indirect tax system, which has recently re-emerged as a significant weapon with which onshore jurisdictions are attacking Cayman and other so-called tax havens. The premier said the indirect taxation in Cayman had no bearing on the taxation that is due and collected by the home jurisdictions of foreign investors here.
“Investors are responsible for tax liabilities in accordance with the laws of their home jurisdictions. Cayman’s transparency supports the efforts to ensure tax compliance with other countries’ tax authorities,” the ministry stated.
Financial Services Minister Wayne Panton said that for nearly 20 years, Cayman’s system has helped to fight serious crimes globally, including money laundering, tax evasion and illicit finance, and that the current initiatives were reinforcing that foundation.
“We recognise the need for closer collaboration, in line with international standards. We support current initiatives in this regard and will do our part to promote transparency in order to encourage global tax compliance,” he added.
In an interview with the Financial Times, Panton took aim at onshore jurisdictions, as he described the idea of public registers as “weak policymaking” because there were no verification of the details.
“The small element of abusers of the international financial system … are the very people who are not going to be honest with voluntary disclosures,” he said, noting that Cayman had been adhering to a higher standard for the past 15 years because it verified the information.
“The suggestion that going to a central public registry with unverified information is a better approach is frankly very disappointing,” he added.
He also defended the right to privacy of the commercial entities doing business in offshore jurisdictions.
“We believe there is a very clear distinction between secrecy and privacy,” Panton said, as he defended Cayman’s stance on not making the info the authorities need available to all.
The minister said there had been a “disproportionate focus on the role of offshore”, ignoring the far great problems in the US, which he described as a weak link. “I think the UK has a problem but it pales in comparison with the US problem,” Panton told the UK paper, as he pointed to states such as Wyoming, Nevada and Delaware that don’t meet global transparency standards.
Cayman Finance CEO Jude Scott, who was also quoted in the FT article, has joined the Cayman delegation to the anti-corruption summit, giving Cayman a significant presence at the event in the absence of many of the jurisdiction’s competitors.
The industry spokesman appeared on SkyNews, where he spoke about how to address global financial crime and corruption through legitimate cooperation and providing accurate information to the relevant authorities. He noted the importance and need for global standards, not standards for some jurisdictions and not others.
Scott also pressed home the idea that Cayman is in a position to help shape the standards going forward and said they were happy to be at the table.
Republished with permission of Cayman News Service