Should Cayman engage the US?

Cayman Fund Focus to address influence on US legislation

The Cayman Fund Focus conference,
hosted by Campbells on 8 October at the Ritz-Carlton, will debate among other
things the potential influence Cayman can have on US legislation and
regulations.

Lunch time speaker Robert Herriott,
a consultant with Constellation Investment Consulting and 17 years experience
in US government politics, has been asked by the organiser to answer the
question of whether it is appropriate or wise for the Cayman Islands to engage
the US government when it comes to financial services or tax legislation and
regulations.

“Not to give too much away,” Mr.
Herriott said, “it is wise to engage the US when it comes to these issues and
when it comes to really any issue.” This also applies to other governments
around the world such as China or the EU, he added, because it is always right
to be heard and to give your side of the story.

Mr. Herriott anticipates his speech
to go beyond just answering the question whether the Cayman Islands should
engage the US government on legislative issues, by addressing the appropriate
way of doing so and highlighting some of the steps that can be taken
immediately. These steps should “focus on the education process of lawmakers in
the US as well as begin building a foundation where you may be able to actually
influence what happens in the legislative process in the US,” he said.

“You need to set the foundation for
education,” he explained. “You need folks to understand what really happens in
the Cayman Islands, to understand that the Cayman Islands has a structure to
it. It has rules. You cannot come to the Cayman Islands and do as you please.
There are strict adherences that you have and really getting that information
out is key.”

He added people were often
surprised to learn about the background of US lawmakers and how this did not
necessarily always match the committee assignments they are placed on.

“They are not [always] elected with
a breadth of knowledge in the key areas where they have to make critical
decisions,” Mr. Herriott said. As a result they are looking for outside groups
and information to help educate them in order to make better decisions.

Targeting this need for education
is key, he explained, as well as having a voice in those decisions, something
that would amount to more of a lobbying effort.

He does not necessarily see a
worsening of the pressure on offshore financial centres as a result of the US
budget pressure and attempts to recover potentially lost tax revenue. “A lot of
that will depend on the upcoming [mid-term] elections,” he said, adding that it
is not so much a question of one side favouring tax shelters, while the other does
not.

“The larger question, when it comes
to attitudes towards places like the Cayman Islands, is more do you look to
have free flow of capital, the freedom to invest monies as the investor sees
fit,” he said. “There is a risk reward equation that goes on. Is it up to the
individual investor to gauge the risk and reap the reward or is it up to a
government entity to tell investors you can or cannot do certain things, trying
to protect them from a certain negative outcome?”

With regard to the US budget
situation he acknowledges a mentality among certain members of the US
government to find more tax revenue, but he believes there is also frame of
mind that the US has a spending problem, rather than a taxing problem.

“There are certainly two distinct
schools of thought in the US government and with elections in the US every two
years there is opportunity for one school of thought to become more prevalent
than the other. And we have one of those elections here in the next few weeks,”
he concluded.

Robert Herriott will be the lunch
time speaker at the Cayman Fund Focus conference, a one day event that will
also tackle the latest regulatory changes in the US, Europe and the Cayman
Islands and their effect on the funds industry. The conference will further
feature panel discussion and presentations on restructuring, litigation and
legal topics as well as issues affecting service providers and investors.

 

For more information on this year’s speakers and programme
and to register, visit
www.campbellsconference.ky.