The European Commission’s Tax Code of Conduct Committee is currently considering whether or not to place Cayman (among 91 other jurisdictions) on an EU blacklist of places it deems “non-compliant with global tax good governance standards.”
Make no mistake about it. The EU and its regulatory henchmen (read Organisation for Economic Co-operation and Development) are not trying to export their failed economic policies. They are trying to export their failed left-leaning social policies.
At least Britain, collectively, had the fortitude to say “enough” to the bureaucratic bullies in Brussels when it voted, to the dismay of globalists everywhere, to withdraw its membership in the EU (the so-called “Brexit” vote).
Other nations are now contemplating following in Britain’s footsteps, and Switzerland, of course, had the good sense never to participate in this ill-conceived utopian union in the first place.
Once again, Cayman finds itself in the crosshairs of a far-away collective of European countries that wants to dictate to us how, and how much, we should tax our citizens. It’s one thing for Cayman to take “orders” from London; it is quite another for us to take them from Brussels.
Lists, in and of themselves, are “listless” threats. Cayman is a perennial headliner on various rankings and registers. (We have our own success to blame. What “reputable” collection of so-called tax havens would be considered complete without the obligatory inclusion of the “notorious” Cayman Islands?)
More troublingly, the contemplated EU tax blacklist, which could be announced in December, also carries the threat of possible, unspecified, economic sanctions.
Most troublingly of all, however, is if, in Cayman’s leaders’ efforts to appease the EU and preserve Cayman’s business with EU countries, they end up destroying Cayman’s business model entirely. Cayman needs to begin contemplating a financial services future that discounts, if not eliminates, its dependency on complying with the political agenda of European regulators. Cayman attorney and industry sage Anthony Travers puts it this way:
“The Cayman Islands would do better to repeal the transparency arrangements with EU jurisdictions, repeal the Common Reporting Standard and focus on transactional flows from the rest of the world without further interference.”
Premier Alden McLaughlin told the Compass that meetings with top EU officials have been encouraging, but we are skeptical. In our view, the EU’s “standards of fairness” are nothing more than the continuation of a campaign to dictate dogma and policies to non-European jurisdictions.
Cayman’s vibrant economy does not depend on direct taxation. To the contrary, our success is predicated on the lack of direct taxation. The idea of imposing direct taxation (and collection) on Cayman’s population would be ideologically unsound, politically unpopular and practically unworkable. (Our government can’t even collect garbage fees from residents, hospital fees for services rendered, or fines levied on our publicly funded national airline.)
We have witnessed an unending series of capitulations from our financial industry, and our government, as they attempt to appease foreign functionaries in Brussels, Paris and, yes, London. Cayman’s beneficial ownership registry, and new regulations on local nonprofits, are merely the latest sacrifices to be laid upon the altar of “compliance.”
As Mr. Travers told the Compass, “You cannot appease an alligator by giving it just one of your legs. You will end up legless, very possibly worse.”
We urge Cayman’s leaders in the public and private sector to send these international interlopers a strong message of confidence in our economic model (it’s far better than theirs) and a reminder that our allegiance is to the United Kingdom – certainly not to them.