“[Donald] Trump said he’s not afraid that people will find out he’s not as rich as he says. ‘Tax returns don’t show that,’ he said. ‘They would show, do I use Cayman Islands stuff? And the answer is no, I can tell you right now. Am I ensconced in some of the crazy countries where you keep money and avoid taxes? The answer is no, I don’t do that.’”
– “The Mogul and the Babe,” Maureen Dowd, The New York Times
Love him or loath him, Donald Trump has a singular gift for encapsulating strains of the American zeitgeist in TV-ready sound bites. And, according to Mr. Trump, “the Cayman Islands” is shorthand for “a crazy country where you keep money and avoid taxes.”
That’s the reputational hurdle our leaders must overcome when negotiating with U.K. and European officials on serious subjects such as the sharing of beneficial ownership information. When it comes to declaring what Cayman’s position is, and what exactly we have committed to do (or not), our leaders would do well to emulate Mr. Trump – in terms of being straightforward and plainspoken.
In regard to Cayman’s stance on financial services transparency, there is no room for lack of clarity.
And yet, confusion is precisely what ensued in the wake of the Anti-Corruption Summit in London last week. The Compass, as did many other international media outlets (including The Economist and The Guardian), and also the U.K. Prime Minister’s Office, reported – apparently erroneously – that Cayman had agreed to the automatic exchange of beneficial ownership information along with major European countries and international financial centers.
Rather, it appears that Cayman wishes to continue playing a game of “wait and see” on beneficial ownership – meaning that Cayman will wait until other jurisdictions, including the U.S., embrace greater transparency, and then we’ll see what happens after that.
In the meantime, Cayman officials want to adhere to our current agreement with the U.K., where Cayman will develop a “centralized platform” of beneficial ownership data, which will be shared when requested by foreign law enforcement and tax authorities.
However, on this crucial issue, we cannot abide by a muddy, murky, or ambiguous approach to our communications.
Our leaders must provide absolute clarity to the people of Cayman, as well as to officials in the U.K. and elsewhere, as to where Cayman stands on beneficial ownership information, particularly if it’s “us against the world.”
We would encourage the delegates to the Anti-Corruption Summit to convene a press conference post haste, in order to explain exactly what Cayman’s commitments and intentions are.
Premier Alden McLaughlin said Cayman deserves a “seat at the table to be part of the development of any new global standards.”
The way we see it, one key point of the global standards appears to have been developed already – i.e., automatic exchange of information.
Our understanding is that Cayman’s position is twofold:
- Cayman will not swerve from our current agreement with the U.K. (information upon request, not automatic) until a “global standard” has been adopted by all major jurisdictions, including the U.S.
- That “global standard” should resemble Cayman’s current approach (information upon request, not automatic).
In essence, Cayman is arguing that we are correct, and nearly everybody else is incorrect. However, it should not be discounted that although our position may be “lonely,” it may also be just.
Nevertheless, considering Cayman’s status as a British Overseas Territory and U.K. Prime Minister David Cameron’s supporting vigorously the “automatic exchange” of information, we should not underestimate the challenge we face – or overestimate our ability to dictate our own destiny.