The Cayman Islands will never change anyone’s mind about its financial services industry merely by talking to those in the international community “who know and love us,” Premier Alden McLaughlin told an annual business outlook conference last week.
Mr. McLaughlin’s recent decision to appear on BBC’s “HARDtalk” program and at a panel discussion event in London’s Chatham House, not an organization noted for supporting offshore financial centers, raised some questions locally about whether the premier was getting in over his head.
However, Mr. McLaughlin said Thursday that Cayman’s leadership must continue to venture into similar situations now and in years to come.
“It is time for us to tell our story and not merely hear of Cayman as a satirical byline in Hollywood films or cannon fodder for [non-governmental organizations] whose zeal for addressing real economic concerns sometimes outweighs their analysis,” Mr. McLaughlin said. “We have a good story to tell and when given the opportunity, we should tell it in our own words.
“To do so means we will, on occasion, have to venture into hostile territory. But we must do so, for we will never change the negative perceptions about Cayman by talking to only those who know and love us.”
Gone are the days, the premier said, when the Cayman Islands leadership retreats into a bubble, blasting the United Kingdom and various financial regulatory agencies. To be considered credible, the premier said, Cayman must take its place “as a willing partner” in having a well-regulated offshore jurisdiction.
“A good working relationship with the U.K. has given the Cayman Islands a ringside seat at the formulation of policies aimed at reversing the flow of capital away from high-tax jurisdictions in the G20,” Mr. McLaughlin said. “I believe it is far better to be in a position where our voice can be heard and where we may influence the outcome of policies that could have a deleterious effect on our development goals, than to be butting heads with the [U.K. Foreign and Commonwealth Office] and our governor with no result to show at the end of it.”
At the same time, the premier said, Cayman is not prepared to surrender equality and fairness in the provision of global financial services or in the enforcement of corrupt practices, wherever they may exist.
In his recent address to the Chatham House think tank in London, Mr. McLaughlin said compliance with transparency initiatives – such as the public registry of beneficial ownership now being proposed by U.K. Prime Minister David Cameron – must be “the international standard.”
“Compliance and transparency cannot be one-way sewers into which small countries are thrown to swim haplessly against the tide,” Mr. McLaughlin said Thursday in his speech at the Fidelity Cayman Economic Outlook forum. “Their use as a punishment for success must stop if cooperation and common ground are to become the global rule.”
The premier said during his “HARDtalk” interview earlier this month that Cayman was “ahead of the United Kingdom” on keeping records of beneficial ownership related to various Cayman Islands entities.
Whether Cayman would make such a register of beneficial ownership public was still open to question.
“As the premier of the Cayman Islands, I have no difficulty, and my government has absolutely no difficulty, in complying with what are international standards,” Mr. McLaughlin told “HARDtalk” host Stephen Sackur. “If the international standards are that there ought to be a public registry for these matters, the Cayman Islands is more than willing to comply.”
Mr. Sackur responded by questioning Mr. McLaughlin further regarding the effect of such a move.
“You’re saying that you won’t be an early mover,” Mr. Sackur said. “Are you really worried that you’re about to lose the essence of what has made the Caymans successful as a financial center?”
Premier McLaughlin said he was worried about nothing of the sort, despite statements from former Cayman Islands Monetary Authority Chairman Tim Ridley that indicated a public registry of beneficial ownership would make Cayman less competitive with other jurisdictions.
“As we have become more transparent … our business has improved,” Mr. McLaughlin said. “Legitimate business wants to be in jurisdictions that are well regulated and transparent.”
The Cayman Islands government is in the midst of a public consultation on beneficial ownership requirements, specifically asking whether the islands should introduce a public register of beneficial owners of Cayman registered entities.