Leaders of Britain’s overseas territories will meet with U.K. officials Tuesday to seek a clearer picture of the likely fallout from Britain’s planned exit from the European Union.
Premier Alden McLaughlin will lead a Cayman Islands delegation in talks over the trickle-down impact of Brexit on Britain’s overseas territories at a specially convened meeting on the Joint Ministerial Council.
Key concerns include the impact on Cayman Islands citizens’ right to work and study in Europe, the likely loss of access to European Union grant funding, and the potential for the split to affect important relationships in the financial services industry.
Wayne Panton, Cayman’s financial services minister, who has been in London and Brussels for a series of meetings over the past two weeks, said there was still significant uncertainty about the impact of Brexit.
Government held a public consultation exercise to hear the concerns of Cayman Islands residents ahead of the meeting.
Mr. Panton said, “We didn’t have a tremendous amount of feedback in relation to that. Part of what that indicates is the level of uncertainty that still exists in Europe, the U.K. and in the overseas territories.”
The impact on Cayman’s core financial services industry will be a key part of the discussions this week, Mr. Panton said in a phone interview from London, Sunday.
“We want to make sure that we have the same opportunities in terms of cross border transactions with EU member states as we do now,” he said.
He cautioned that it could still take several years for Britain to fully withdraw from the European Union and establish a new relationship with the political bloc.
Over that time, he said, the issues and the impact on the Cayman Islands could change significantly and the overseas territories needed to ensure their concerns were considered.
One potential political area of concern is the European Union’s stance on low tax jurisdictions.
In an early analysis of the possible impacts of Brexit on Britain’s territories, Cayman Islands law firm Harneys highlighted the looming threat of the EU’s plan to create a “common EU list of problematic tax jurisdictions” by the end of 2017.
“The political element of this is extremely high and the probable absence of the U.K. as an influential voice increases the likelihood that this may become an attack on low tax rates,” Harneys wrote in its analysis.
Mr. Panton said it was becoming increasingly important for the Cayman Islands to tackle its critics head on and articulate its own position forcefully to policymakers in London and Europe. He and a team of senior officials from his ministry met with key opponents of offshore jurisdictions over the last 12 days in Brussels and London, including the European MPs and officials responsible for the tax blacklist.
Mr. Panton said, “We have come to the conclusion in the last couple of years that we need to take an unapologetic approach and explain Cayman’s legitimate and important role.
“We have to confront the false narratives and challenge people to review old assumptions and present them with the current reality of the Cayman Islands as a well-run, well-regulated financial center that plays a significant role in the global economy.”
During the trip, Mr. Panton took part in a panel discussion on corporate taxation at the Centre for European Policy Studies and met with officials including:
Valere Moutarlier, whose department is responsible for the EU’s proposed blacklist
Pierre Moscovici, the European Commissioner for Economic and Financial Affairs and Customs, who in June 2015 announced the names of jurisdictions that the EU considered non-cooperative
Werner Langen, who chairs the European Parliament committee tasked with investigating the Panama Papers revelations and tax avoidance schemes
Alain Lamassoure, who is a member of the European Parliament’s Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion.
Mr. Panton also met with British Labour Party MPs attempting to push through an amendment to the U.K. Corporate Finances Bill, which would impose public registers of beneficial ownership information on the overseas territories. He said he had also successfully lobbied government MPs, persuading them not to support the opposition-led amendment.
“I don’t know if we changed their minds, but we can say that there area areas in which we found common ground and some members on the Conservative side that were in support have now changed their position,” Mr. Panton said.
He added that the series of meetings had gone well and given the Cayman Islands the chance to articulate its position.