Financial Services Minister Wayne Panton is still battling to get the Cayman Islands taken off the latest blacklist, maintaining that the inclusion of Cayman on the European blacklist of financial centres was completely inappropriate and misinformed.
However, he said that stigma and the position taken by some nations on tax competition made the battle for removal challenging, even as Cayman continues in its efforts to meet the demands of increasing international regulation in the financial sector.
Panton said there were no real grounds for Cayman to be named in the latest list compiled by the European Union’s council and tax watchdog. The listing is based upon national blacklists from European countries that are not major economic trading partners of Cayman.
The jurisdiction already has many bilateral agreements with EU countries but not enough, Panton was informed, to keep Cayman off the list. A deal with Spain that has been on the table for years is being held up by the UK’s own diplomatic issues with that country over Gibraltar, If this was signed, it would mean that only seven EU countries would not have a direct tax exchange deal with Cayman.
With these seven still causing an issue for the jurisdiction, Panton has written to all those states because some do not understand that Cayman is already sharing information under the multilateral convention that this jurisdiction has also signed.
“Where we are today, we should not be on any pan-European list,” he said, as he stressed Cayman’s credentials on the global stage for compliance. He said he has reached out to all the countries involved as well as the European Council to explain Cayman’s position and to express concern over the inappropriate blacklisting. He said the OECD has also written to the countries involved, as officials there disagree with the list and have stated that Cayman is not an uncooperative jurisdiction as alleged by the blacklisting.
Addressing the misunderstandings about what information is shared is not as challenging as addressing attitudes and perceptions, Panton said. That, he warned, is where the battle becomes particularly difficult. The minister explained that some countries have blacklisted Cayman because of unfair tax competition because the jurisdiction does not have direct taxation.
“It is an argument we think is discredited,” Panton said, pointing out that countries are still trying to force Cayman and others jurisdictions using consumption rather than earnings as a basis for collecting taxes to change.
Noting that Cayman is a small country and does not have much leverage, he said these issues would always be difficult to address, however he would continue to defend the reputation of the jurisdiction regardless.