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Cayman to extend BO info exchange and repeal secrecy law

| 11/05/2016 | 22 Comments
Cayman News Service

Premier Alden McLaughlin, Financial Services Minister Wayne Panton and Cayman Finance CEO Jude Scott

(CNS Business): After just two days in London, the Cayman Islands Government has announced plans to enter into deals, similar to the one it has with the UK, over the exchange of beneficial ownership information with other jurisdictions and to amend the notorious secrecy law. 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 here.

Keen to stress the years of cooperation and what the CIG 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 world-wide.

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.

See Sky News video interview here

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Category: Finance, Financial Services

Comments (22)

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  1. Anonymous says:

    The article’s title really threw me a curve as I thought this was going to be about Body Odor and related secrets…

  2. Sharkey says:

    I think there goes the end of the Islands off shore banking .
    Correcting this system is going to be too complicated for these politicians to do it correctly .
    Why have your system the same as every other off shore system ?
    If it’s not broken don’t fix it .

  3. Grumpy the Cat says:

    It sounds like many of the posters on here do not understand that there is a world outside of the Cayman Islands. There are some important events around some funky law firm in Panama and some “independent” journalist organization that has galvanized much of what in the past was just conjecture.

    CNS: The rest of this comment is posted in full here: Cayman is on the right path

  4. Anonymous says:

    Interesting to hear the wailing doom-mongerers on here. If Cayman is doing nothing but above board business these changes would make no difference at all apart from the PR cost of users of the jurisdiction being linked to the bard “Cayman Islands” which is quite toxic right now.

    • Anonymous says:

      I agree.

      The vast majority of people involved in the financial services industry in Cayman (a disproportionately small number of whom have time to post on this website) support the efforts being made by the CI Government to tread a delicate balance between preserving a legitimate right to privacy while ensuring that we meet international standards for information sharing and avoid blacklisting.

      From what I can see, the CI Government has simply confirmed a timeframe for implementation of plans it already had in relation to confidentiality and data protection legislation (in the works for years), agreed that it would adopt the same approach to information sharing with EU jurisdictions as it already agreed with the UK (no public central register) and has committed to being part of efforts to look towards a global standard for information sharing.

      We can’t stick our heads in the sand and refuse to cooperate and it is much more satisfactory to be in the room and part of the conversation than to be excluded (as BVI (with its far greater proportion of the shell or holding company business which is really the target here) seems to be at the moment, for example). In simplistic terms given the political climate it is surely better to be considered “good” offshore than “bad” offshore.

  5. WaYaSay says:

    Well, that was quick.
    I suspect these three were called into a room for a “meeting” where they were handed a document, given enough tome to read it, and told to sign it. End of discussion.
    I also suspect that they were given prepared statements for the press and a list of talking points to parrot when asked questions by Caymanians, the clientele or the press when they return home.

    There is no way that what has transpired and what is being publicly discussed now, was the impression that these three gave to the Caymanian public prior to their leaving on this mission.
    It is also no way that Jude Scott voiced what has transpired as their intended outcome of this expensive trip, to the industry, or to the industry’s clientele, prior to leaving. Had he done so the uproar from the 1%ers would have started before they landed in London.

    Oh well, it is so the cookie crumbles…………….. perhaps soon, when I travel internationally and present my Cayman passport, I can be looked upon as something other than a money launderer, as I have never worked in this elite 1%er industry

  6. Anonymous says:

    These guys will do anything they are told..What about coming back to Cayman and discussing this with its citizens before just signing us up ..Geesh, you weren’t even there 48 hours. How much thinking did you really put into this..Alden and Wayne, we hired you to be leaders not followers..You have let us down and sold us out!

    • Anonymous says:

      @6.06am You sound like UDP . Not thinking, just hating. Please read above post by Anonymous @ 9.44am on 12/May and you might learn something.

  7. Anonymous says:

    As long as Cayman, and a few other territories, have a few cents to rub together the UK will not stop until those are gone as well. Those who have always controlled and prospered do not believe that anyone else should. The only thing they want to see us do, is smile while handing them a rum punch.

  8. Anonymous says:

    “Confidential Information DISCLOSURE” Law. Umm, isn’t there an oxymoron in there somewhere? But then again we seem to have nothing but morons acting on our behalf.
    One question, on a matter of such importance, why the rush? Just last week these same (ahem) men said there would be no such deal. Could they not have politely told the UK Gov, given that they are not appointed nor anointed by the UK Gov to serve us, that they would have to take this matter back to the people who did actually elect them to serve? Even if the result was that the UK would insist, even if by way of Order in Council, at least the (ahem) men would have looked like they were in possession of their cajones. This just seems to be a really bad deal. I hope I can be convinced otherwise.

  9. Legaleasy says:

    Note to the Draftsman. Please remove the word “Confidential” from the title of the new law. Otherwise it will continue to be called the secrecy law.

  10. Anonymous says:

    I am happy to see that Jude Scott accompanied the Premier and Wayne Panton instead of Roy McTaggart as was previously announced. I wondered what exactly would Roy add to the discussion. Understanding a bit of what is being discussed at these meetings I think they seem to be making the correct statements.

    • Anonymous says:

      Councillor McTaggart is a part of the CIG delegation – the coverage has been clear. Jude Scott is not. And trust me that Roy contributes as significantly or more so than Jude.

    • Anonymous says:

      Good to have us represented by educated and honest Caymanians, in contrast to the buffoon who brought shame on all of us with his loose cannon hot air utterances.
      Well done guys, we live to fight another day.

  11. Anonymous says:

    The three stooges basically gave away Cayman’s life!

  12. Anonymous says:

    God help us.

  13. Anonymous says:

    Still won’t be close to enough to avoid the EU blacklist. Publicly searchable registers will be needed for that.

  14. Anonymous says:

    Alden and Wayne sold out Cayman

  15. Island Bundy says:

    Looks like it is time to find a new jurisdiction. Cayman is done. All over. Finished. Goodnight.

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