Private sector is key to compliance

While the Cayman Islands government continues to make great strides in securing Cayman’s position as a solid offshore centre, a recent lunch hosted by the Cayman Islands Financial Services Association highlighted the increasingly important role private sector organizations like CIFSA can play.

Members of Cayman’s financial services sector, MLAs including Alden McLaughlin and McKeeva Bush along with students and members of the wider business community all attended the first Cayman Islands Financial Services Association lunch on 3 December.

‘Having only been established four years ago, we have already achieved a lot towards our main objective, which is to communicate the quality and integrity of the Cayman Islands financial services industry, both internationally and locally,’ said CIFSA director Eduardo d’Angelo Silva, in his welcome.

Mr. Silva detailed recent public relations and communications developments within CIFSA, including the launch of a public relations exercise and the new CIFSA website.

The choice of keynote speaker John Fund was that much more fitting, in that his remarks centred on how an increasingly globalized world means Cayman must prepare for new international public relations and political pressures, in particular from the United States in an election year.

Mr. Fund, an author and journalist, writes the weekly politics and policy ‘On the Trail’ column for the Wall Street Journal, and contributes to the American Spectator and Fox News.

Mr. Fund said that however economically globalized the world may be, globalization also has a profound effect in policy and public relations terms.

‘As Cayman is well aware, unexpected events do happen and you may not always be able to predict or sense the political and policy change bearing down on you,’ he said.

He warned that Cayman needs to face these pressures proactively:

‘If someone is about to punch you in the nose you need to be prepared,’ he said.

‘You don’t need to do something out of character, but you definitely need to be assertive and confident.’

He said that the coming US election may get that kind of action from Cayman.

‘The US needs to reform its finances. The Democrats will likely win the next election, and will be looking for new revenue without new domestic taxes, through any loophole. And Cayman is a loophole,’ he said.

Last year, Democratic Senator Carl Levin chose to wage war on offshore centres, specifically honing in on Cayman.

‘More recently, Democratic Senator Max Baucus and other members of the US Senate Finance Committee gained a lot of media exposure over their supposed concerns there is an enormous tax scam going on at Ugland House,’ said Mr. Fund.

‘And in a globalized world, perception is the new reality: it is necessary to act smarter, better and faster to make sure the information people are getting is the right information.’

Mr. Fund remarked that Cayman plays a critical role in the finances of major institutions like pension funds and university endowments.

‘You need to get to the stakeholders it will impact,’ he said.

He highlighted that in an election year, politicians and candidates will jump on issues in order to make a name for themselves in the media, whether they believe them to be truly valid or not.

‘So in the end it doesn’t matter if you are in the right if a negative perception is already out there,’ he said.

‘When it comes to US politics, as they say, it’s nothing personal, it’s just business, and being non-confrontational may end up not only having a dollar cost but a reputational cost as well.’

He stressed the importance of deflecting blame from manufactured issues.

‘For example, while there may be 13,000 companies registered at Ugland House, that is only 1/20th the number registered in the state of Delaware. It might be worthwhile asking the US why it doesn’t clean its own house first,’ he said.

‘And when it comes to maritime registry, certainly there are a lot of ships registered here, but there are thousands registered in Liberia – maybe the US should go talk to them first.’

Mr. Fund emphasised the need for Cayman to send a message to the American people that it is providing a needed service.

‘You have friends, but you have to be ready for criticism because you’re too tempting a target, and your adversaries want you to sit back and take it.

‘No matter who winds up in the White House this will become an issue. Success breeds envy and for that reason you will be facing new challenges.’

Mr. Silva said the speech underscored the importance of the partnership that can benefit the Cayman Islands between the Cayman Islands government and CIFSA.

‘When it comes to public relations there are certain things best left to government and others best left to the private sector, it makes sense,’ he said later.

‘I think what Mr. Fund had to say was extremely valid, although we also can’t forget about the UK and Europe. What we can take from this is a reminder that we don’t exist in a vacuum and we will definitely benefit from looking at collaborating with entities in the US to counter any negativity before it arises, to go from being reactive to proactive.’

The sentiment was mirrored by Cayman Islands Monetary Authority chief Tim Ridley.

‘We certainly do need to be continually improving the creation and delivery of the Cayman financial services product and ensuring that we debate and inform those who still have misconceptions about the legitimate and beneficial role we play in global markets,’ he said.

‘The use of lobbyists, media experts and think tanks all form a critical part of that.’

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