If the United Kingdom decides to mandate a public beneficial ownership registry for Cayman companies, the Mother Country will face a legal challenge in the Cayman Islands courts, Premier Alden McLaughlin said Wednesday.
“The position of the Cayman Islands government is the attempt by parliament to legislate for this territory … is unlawful and we do not accept it,” Mr. McLaughlin said.
The premier’s comments were made at a government press conference Wednesday afternoon where he was flanked by Opposition Leader Ezzard Miller, Cayman Finance Chief Executive Jude Scott and Cabinet Secretary Samuel Rose.
Mr. McLaughlin said Cayman would not seek any challenge within the U.K. courts to the May 1 vote in the House of Commons that amended Britain’s Sanctions and Anti-Money Laundering Bill. The amendment inserted a requirement in the bill that all U.K. overseas territories – but not Crown dependencies – implement an open public register of company ownership by Dec. 31, 2020. If that deadline is not met, the bill requires the U.K. Secretary of State to draft orders in council to force the territories to comply.
Premier McLaughlin said legal advice received by Cayman’s government in the U.K. noted that taking action against the vote in the Commons “brings the difficulties inherent in the arguments surrounding parliamentary supremacy.”
Parliament is the supreme legal entity in the U.K. and even if the courts do find its decisions to be unlawful, it is ultimately up to the lawmakers themselves to go back and change them.
The premier said government would wait to see if the U.K. issues the order in council to require the establishment of a public company ownership registry and then wait further to see if it seeks to implement that in Cayman.
“Cayman’s best course of action is to challenge any decision of the U.K. government by order in council to amend local legislation … which will render the issue to our courts here,” Mr. McLaughlin said. “That [challenge] will never happen if the U.K. doesn’t make the order in council.”
Premier McLaughlin said the legal battles surrounding that process were likely to take years and, in the meantime, regulatory standards could change.
“When this becomes a global standard, Cayman is there,” he said.
Mr. Scott said he doubted that would ever occur. “In large jurisdictions, quite likely, [the public register of companies] will never be a standard they will ever follow,” he said.
In the meantime, Premier McLaughlin said he considered prior agreements made with the U.K. to allow law enforcement agencies and legal taxing entities to inspect Cayman’s existing register of companies null and void as a result of the U.K. parliament’s vote on May 1.
Mr. McLaughlin said he did not want that comment to be misinterpreted as Cayman refusing to meet international obligations in fighting against money laundering and terrorist financing, but he said the specifics of the “exchange of notes” agreement made with the U.K. need no longer be followed.
“We are now, as we regard it, freed from any obligation under the original agreement,” the premier said.
Premier McLaughlin said he brought up the issue of constitutional change during meetings last week with U.K. Prime Minister Theresa May and senior MP David Lidington, seeking to prevent a reoccurrence of what happened with the May 1 House of Commons vote on the amendment to the Sanctions and Anti Money Laundering Bill.
The issue was summarized by Mr. Miller, Cayman’s opposition leader: “We are … very concerned that if they’re allowed to get away with this act, there’s no telling where they will stop.”
Mr. Miller opined that the U.K. could force changes to things like Cayman’s Immigration Law, voting rights and other issues historically considered to be local matters.
Mr. McLaughlin said he considered the issue of whether Cayman decides to have an open public register for its companies to be one for the locally elected government alone.
“We are striving to have aspects of the constitution clarified to ensure that the ability of the U.K. parliament to legislate for the Cayman Islands and its other overseas territories is significantly restricted,” the premier said.
For instance, Mr. McLaughlin said, Cayman proposes that the reserved powers to legislate for Cayman given to Her Majesty’s government under section 125 of the Cayman Islands Constitution Order, 2009, should be removed.
The U.K. has taken such a step with one of Cayman’s sister territories, Bermuda, after which U.K. foreign officials declared there would be “no more Bermudas” – insisting that the remaining territories either maintain their current constitutional status or seek independence from the U.K.
Mr. McLaughlin said any constitutional changes that are made should provide that, as long as Cayman is in keeping with its international obligations and standards, its power of self-governance is “absolute.”
Mr. McLaughlin said he did not perceive any of the U.K.’s recent actions, or Cayman’s challenging of those actions, as “steps toward independence.”
“But if the U.K. parliament comes to believe they can legislate for the territories any time they disagree … it is a threat to our very existence,” he said.
Via: Cayman Compass