The Cayman Islands (‘Cayman’) Minister for Financial Services and the CEO of the financial services industry body, Cayman Finance, have both issued statements addressing the issues raised by the recent leak of information from a law firm in Panama. The leak has drawn negative press attention to international financial centres (IFCs), including those which are not mentioned in the leaked documents (like Cayman). In their statements, Minister Panton looks at current and future action being taken to further improve international transparency for the future, whereas Mr Scott of Cayman Finance stresses the need for a clear understanding of the positive role which international financial centres play in the global economy.
Mr Scott stresses Cayman’s commitment to transparency and its proven track record for leadership on international regulatory issues, cross-border co-operation, and for setting global standards to fight financial crime. He praises Cayman’s regulation and cross-border cooperation regimes as surpassing those in many of the world’s top IFCs. Cayman was an early introducer of comprehensive and strict anti-money laundering laws and know-your-customer rules and regulations, well ahead of other IFCs and G20 countries. He added that Cayman continues to lead the way in effective transparency and cross-border cooperation, including on Beneficial Ownership Information (‘BOI’): “For example, Cayman’s current corporate services provider verified beneficial ownership system is world class in providing for due diligence know-your-customer checks and is superior to the UK’s proposed non-verified, self-reporting public registers.”
Cayman Ministry of Finance
Minister Panton addresses the issue of further progress on an agreed international system of transparency in BOI. The existing mechanisms provide for sharing information (including BOI) for tax purposes with more than 90 jurisdictions. These mechanisms include tax information exchange agreements, the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the double tax arrangement with the UK, Foreign Account Tax Compliance Act (‘FATCA’) agreements with the USA (and the UK), and the OECD’s Common Reporting Standard (‘CRS’) (for information sharing with 95 other jurisdictions, including the majority of G20 countries).
Minister Panton commented on the progress the UK and Cayman made on a way forward for BOI in February’s meeting in Cayman. “We are pleased that the proposed joint commitment recognises that Cayman’s proposed enhancements to our current beneficial ownership regime represent a viable alternative to the UK’s approach of a central register. This affirms our longstanding adherence to implementing international standards in a way that is effective and appropriate for our jurisdiction”.
Minister Panton expressed Cayman’s support for the UK’s efforts to combat serious crime and also praised the Cayman financial services industry’s willingness to comply with globally accepted and practised regulatory standards.
“With our decades of engagement with international initiatives, and our current programme for further enhancements, Cayman clearly is collaborating and cooperating with all countries that adhere to global standards for the sharing of information’” Minister for Financial Services, Wayne Panton.
Mr Scott sets out the positive role played by IFCs such as Cayman: “The Cayman Islands is a global financial hub that efficiently connects law abiding users and providers of capital and financing around the world – benefitting both developed and developing countries.” “The Cayman Islands benefits on-shore jurisdictions by enabling them to be competitive in international trade and in facilitating effective inward investment to help grow those economies.”
Solomon Harris Partner Richard Addlestone was quoted extensively in today’s CNS Business article on the leak of information from Panama law firm Mossak Fonseca. Please see his comments made on CNS at this link: https://cnsbusiness.com/2016/04/05/caymans-compliance-vastly-superior-to-panamas