Another chess piece moves as pressure mounts for Cayman to sign up to a registry to reveal account information.
Premier Alden McLaughlin insists Cayman will not be a guinea pig, but has agreed to discussions with more than 40 other countries to develop a global standard of sharing information.
Mr. McLaughlin and other top officials are in London for Thursday’s (12 May) International Anti-Corruption Summit, where talks will begin.
“There’s no standards at the moment. What there is at this stage is simply discussions, about what such a standard should be,” said Mr. McLaughlin, via telephone from London, explaining the latest beneficial ownership initiative Cayman has joined.
“Our commitment to the initiative is because we believe that it is important that we have a place at the table to help develop this global standard, as we have done with respect to a whole range of other initiatives that apply to the financial services sector,” said Mr. McLaughlin.
To be clear, Cayman has not signed up to any sort of public registry for beneficial ownership information. The exchange of notes agreement with the UK, announced in April, still stands as-is.
But in the wake of the Panama Papers scandal, the heat is on to create a world-wide standard for automatic exchange, something Mr. McLaughlin told Cayman 27 he will consider as long as the playing field is level for all countries.
“Whatever the global standard is, with respect to these issues, Cayman is there. What Cayman is not prepared to do is to be a guinea pig or to subscribe to different standards, different systems, one for overseas territories or offshore financial centers and one for the rest of the world,” the Premier told Cayman 27.
He said Cayman’s presence gives the country a voice in the discussion, on a topic that’s of huge importance to our economy.
“We’ve got to be responsible. This isn’t about one government or another, this is about the survival of an entire industry on which the whole Cayman economy is heavily reliant,” said Mr. Mclaughlin.
He insisted a global standard will keep Cayman’s financial services industry competitive.
“We can compete with the best of them if the playing field is level,” said Mr. McLaughlin.
The Premier said without a global standard in place for beneficial ownership, business will migrate to jurisdictions with less regulatory burden and lower standards.
Cayman is also reaching out to other participants in this latest initiative to enter into exchange of notes agreements similar to the one in effect with the UK.
Government also wants to repeal the so-called ‘secrecy law’ [Confidential Relationships (Preservation) Law] and replace it with the Confidential Information Disclosure Law, which government hopes will better clarify the mechanisms through which confidential information may be shared with appropriate authorities.
Additionally, while bearer shares have been immobilised in Cayman for more than 15 years, legislation has been passed to completely abolish bearer shares by the 13th of July.
The Ministry of Financial Services said in a statement early Wednesday morning (11 May) that while the jurisdiction operates under a system of indirect taxation, that has no bearing on foreign investors and the taxes due in their home jurisdictions. Such investors are responsible for their tax liabilities in accordance with the laws in their home jurisdictions.