Cayman makes last attempt to avoid EU blacklist

An aerial view of the business area of downtown George Town, Grand Cayman
An aerial view of the business area of downtown George Town, Grand Cayman. – Photo: Chris Court

A Cayman delegation left for London Friday with little more than a week left to appeal to U.K. and European officials against its potential inclusion on a financial services “blacklist” being promulgated by the European Union group of finance ministers [ECOFIN].

According to the premier’s office, tax transparency measures, requirements to detail the beneficial ownership of Cayman-registered companies and trusts and the proposed EU blacklist will all be discussed at this week’s Joint Ministerial Council meeting of the U.K. and British Overseas Territories leaders.

Accompanying Premier McLaughlin will be Financial Services Minister Tara Rivers and her ministry’s chief officer, Dax Basdeo, as well as several other government officials.

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The Cayman Islands is one of 92 jurisdictions that expect to learn by Dec. 5 if they will be placed on a European Union blacklist being drawn up as part of a tax avoidance crackdown.

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The European Commission’s Tax Code of Conduct Group has been reviewing various taxation criteria since January 2016 for all jurisdictions that have significant dealings with the EU.

Placement on the EU tax blacklist could lead to as yet unspecified economic sanctions being imposed by year’s end, according to earlier statements from the EU.

In order for Cayman, or any country, to be placed on the blacklist, a unanimous vote of the 28 ECOFIN ministers is required, including the U.K. finance minister. The U.K. remains a member of the union until March 2019, when it is expected to effect its exit from the international governing body.

According to a statement from the premier’s office; “The Premier and Minister [Rivers] will have a bilateral meeting with Lord Ahmad, the [U.K.] Overseas Territories Minister to discuss matters of mutual importance to the U.K. and the Cayman Islands. It is expected that separate meetings and discussions may be had with EU officials with regards to the proposed European Union listing of non-cooperative jurisdictions.”

Premier McLaughlin has already said Cayman would accept the EU blacklist, if conditions for being removed from it would significantly damage or destroy the rest of the territory’s financial services industry.

The JMC meeting is also expected to review current timelines and plans for the pending U.K. exit from the European Union and how that exit will affect the overseas territories.

Hurricane relief efforts in the wake of 2017’s disastrous storms in the eastern Caribbean will also be discussed.

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