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(CNS Business): The Cayman Islands and other offshore jurisdictions have currently taken centre stage in the US presidential campaign as Republican candidate Mitt Romney comes under sustained attack from the Democrats and the media over his use of offshore accounts. “Obama's demagoguery is not good for Cayman's financial industry. It augments the image built up by popular culture that places such as Cayman and Switzerland somehow are rogue regimes,” Dan Mitchell of the Cato Institute told CNS Business. Asked about how they are responding to the negative publicity resulting from the election campaign in the US, Cayman Finance says it has been “putting plans in place for some time to protect the financial services industry from further ill-informed reputational attacks in the US.”
Mitchell, who is a strong advocate of a flat tax and international tax competition, added, “It's very hard to overcome popular culture, but it is very important to make sure the financial, political, and journalistic elite understand the truth. Even simple gestures like letters-to-the-editor are helpful. We try to do our part by briefing lawmakers and journalists.”
But with the US campaign hotting up and daily headlines in the US media, the image of the Cayman Islands is steadily cementing as a shady place to do business. How is Cayman Finance reaching out to counter the negative PR?
A spokesperson from Cayman Finance stated, “Working with our Washington counsel, we are presenting the case on how investment via Cayman brings in foreign direct investment,” without elaborating on the methods they are employing to achieve this.
At Cayman Finance's request, PricewaterhouseCoopers (PwC) has prepared a study on US Foreign direct investment (FDI) via Cayman, she said, although a request by CNS Business for a copy of the study was declined.
“We are ensuring that a clear and easily understood message about Cayman's contribution to the US economy is distributed in Washington. FDI in the US via Cayman measures in the hundreds of billions of US Dollars. It creates jobs in manufacturing and services, both for domestic consumption and export,” Cayman Finance said.
“It is inevitable given Mitt Romney's candidacy and Barack Obama's campaign strategy that Cayman will remain in the news through November. Our goal is to do more than weather the storm. Instead we are seeking to use this opportunity to educate policy makers in Washington about how the financial, legal and accounting businesses in Cayman deliver international capital to US businesses without adding the toll charge of an additional layer of tax.
“After the election, this should help to ensure that US lawmakers are properly informed when considering legislation concerning inward investment structured via Cayman and its positive impact on US industry and jobs.”
Meanwhile, Cayman Finance's counterpart in Bermuda appears unconcerned by the publicity, despite the media attention given to a Bermuda-based entity called Sankaty High Yield Asset Investors Ltd, which, it has been suggested, the Romneys used to avoid paying US taxes.
A spokesperson from Business Bermuda, responding to questions from CNS Business, said, "Bermuda is different than Cayman. Our business is broader and more substantive in nature. We recognize that there is a difference between campaign rhetoric and governing policy. Our outreach efforts will take this into account and the timing, tactics and investment will be based on this approach."
The comments posted do not necessarily reflect the views of CNS or any individual staff member. All comments are posted subject to approval by CNS. Read more
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