Cayman takes Miliband to task

(CNS Business): Accusing Ed Miliband, Leader of the British Labour party, of trying to distort the issue of beneficial ownership “in light of readily available, third-party assessments and facts”, Cayman’s finance minister said that the warning letter that he is reportedly sending to all British overseas territories has so far not been received.

Miliband told the UK press at the weekend that if the Labour party wins the UK general election in May, the BOTs will be required to introduce publicly accessible beneficial ownership registries or face blacklisting. He said he was warning them by letter what they should expect if he is the next UK prime minister.

However, no such letter has been received by the Cayman Islands government, Minister Wayne Panton said in a statement. “Cayman therefore can respond only to media reports about Miliband’s insinuations regarding our beneficial ownership regime.”

In his statement, the minister noted his surprise that a UK elected official, “who should be well versed in the current discussions on this important topic, would attempt to publicly distort the reality in light of readily available, third-party assessments and facts”.

“In short, Mr Miliband is wrong. How is he not aware that the OECD, the Global Forum on Transparency and Exchange of Information for Tax Purposes, the Financial Action Task Force, the G20, and the International Monetary Fund all disagree with his broad general statements?” he asked.

Stating that Cayman fully supports the global agenda of fighting tax evasion, he said that the jurisdiction’s regime, “which has been in place for more than a decade, continues to align with principles that the G20 countries themselves uphold as the standard”.

He said that in light of the evolving, current international discussions, Cayman had identified specific steps, including enhancing accuracy, access, availability and monitoring and enforcement of ownership information, that will further strengthen its beneficial ownership framework.

“Mr Miliband should specifically note that, unlike the UK, the Cayman Islands has known for more than a decade who owns Cayman companies, and we share that information with authorities carrying out investigations. Furthermore, we also share information with the UK in respect of UK taxpayers who may have interests in the Cayman Islands.

‘The only thing that remains a secret today is why Mr Miliband is not aware of all of this,” Minister Panton said. “I invite him to speak with Cayman’s Government, in order to enhance his understanding of our regime,” Panton said.

Cayman Islands Stock Exchange Chairman Travers said the Leader of the Opposition was “more hopelessly out of touch in relation to international tax avoidance than in relation to domestic matters”.

Travers, a former Cayman Finance chair, added, “In fact the overseas territories have maintained complete records on ultimate beneficial ownership to the international gold standard set by the OECD for over two decades.

“What quite the OECD would make of Mr Miliband’s threatened report given the OECD’s own verification on the subject and the overseas territories commitment to the OECD Automatic Reporting Standard is a matter for conjecture and possible further embarrassment.

“Nor, in the light of the unlimited powers to undertake investigation of these beneficial owners granted by the overseas territories to the IRS and HMRC by treaty, does his suggestion that the ‘authorities’ have been hampered in undertaking tax investigations bear any relation to the reality.”

His statement continues, “OECD Secretary General Mr Angel  Gurria has stated that companies cannot be blamed for taking advantage of lawful tax avoidance and indeed it is to domestic tax legislation on transfer pricing (ironically based on the OECD model) that Mr Miliband should look if he wishes to capture the ‘billions” to which he refers.

“An informed politician, genuinely concerned about tax evasion and tax avoidance, as opposed to making populist sound bites should be lauding the standards of transparency set by Overseas Territories as the example to which other jurisdictions, notably the wholly opaque US corporate centres of Delaware, Wyoming and Nevada, should now be held and making more detailed enquiry of the double tax treaty abuses that are routinely adopted in the European centres,” he added.

Related article on CNS Business: Labour will demand public register for UK’s territories

Tags: beneficial ownership, Ed Miliband, Featured, Wayne Panton

Category: Finance, Financial Services