Legal advice sought on ‘direct rule’ threat

The Cayman Islands government has engaged “top constitutional counsel” to challenge any potential threat of the U.K. taking “direct rule” of its territories.

Jeremy Corbyn
Jeremy Corbyn

Premier Alden McLaughlin said the suggestion from U.K. Opposition Leader Jeremy Corbyn, in the wake of the Panama Papers leak, was “preposterous.”

“It demonstrates both a lack of appreciation of constitutional law and the relationship between the U.K. and its territories,” said Mr. McLaughlin.

He said he was confident the Conservative-led U.K. government did not share Mr. Corbyn’s “misconceived views.” But he said the Cayman Islands government was ready for a legal battle if necessary.

“I wish to be very clear that the government of the Cayman Islands takes the threat of ‘direct rule’ carried by Mr. Corbyn’s words most seriously. Indeed we have engaged top constitutional counsel in the United Kingdom to defend the interests of these islands through legal challenge and representations to the United Nations, should that become necessary.”

Mr. McLaughlin said the threat was all the more absurd in relation to the Cayman Islands, which has not been mentioned in the documents stemming from the leak. He said Mr. Corbyn was damning the territory without any evidence of wrongdoing.

Last week, the Labour Party leader told the BBC that the Cayman Islands should conform with British tax laws.

“If the local government is simply going to condone this level of tax avoidance and tax evasion of money that has been made in Britain, then that’s something that has to be considered,” he said.

“They’re not independent territories. They are self-governing, yes, but they’re British Crown dependent territories. Therefore, surely, there has to be an observance of U.K. tax law in those places.”

Mr. McLaughlin said the comments were surprising.

“I am surprised to hear this champion of oppressed peoples reverting to the worst excesses of 18th Century colonialism.”

He said he was confident that the ruling government had no plans to impose direct rule.

“I and my government, and in particular the Minister of Financial Services [Wayne Panton], continue to engage in constructive discussions with the United Kingdom Government regarding the effective and efficient provision of beneficial ownership information to the United Kingdom law enforcement and tax regulatory authorities in furtherance of the Cayman Islands’ commitment to fighting serious crime and tax fraud,” Mr. McLaughlin said.

“I am confident from those discussions, as recently as today, that the U.K. Government does not share Mr. Corbyn’s misconceived views,” he added.

He said Cayman has decades of engagement with international initiatives around anti-money laundering and tax evasion, and has mechanisms for exchanges of information on tax and beneficial ownership information.

He highlighted tax information exchange agreements, the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, European Union Savings Directives and the double tax arrangement with the U.K., which allow for the sharing of information with more than 90 jurisdictions.

Additionally, Cayman automatically shares information with the United States and U.K., for FATCA purposes and is committed to the OECD’s Common Reporting Standard along with 95 other jurisdictions, including the majority of G-20 countries, he said in a statement.


  1. I think the British people who have Cayman Residence and statuses will need to stop hiding behind the Cayman Coat of Arms on this. They will and should have some say because they opted to be Caymanians, and I don’t know why but I smell something not too good coming out of this. Looks like it is going to be an icy day in hell come soon.

  2. The only country in the world that taxes people on their citizenship is the USA.
    Every other country, including the UK, France, Germany and Canada states quite clearly that if you don’t live there you don’t pay taxes there.
    (Although the UK differentiates between residence and domicile for inheritance tax purposes).
    Nothing illegal or vaguely dishonest. In the same way if an Australian citizen, for example, lives in the UK they cease to be liable to pay Australian taxes but are required to pay UK taxes.
    Somehow or other this tiny island is supposed to be the world’s tax collector. Enforcing not only USA and UK tax law but theoretically that of every other country in the world.
    We are even held to blame for what Panama might do.
    Meanwhile of course total secrecy is available for just a few hundred dollars in the USA states of Delaware, Wyoming and Nevada. States that advertise their secrecy laws ad almost invite tax evasion.
    As usual it’s do as we say, not as we do.

  3. Anyone who takes anything Jeremy Corbyn says seriously or regards him as a threat clearly hasn’t been watching UK politics. This nonsense he spouts at regular intervals is a combination of self-delusion and the need to keep his dysfunctional mish-mash of supporters happy. The guy is an unelectable idiot and I post that as registered voter in the UK who in June will be voting to get us all out of the EU.

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