The “real victims” of divorce are often the children. We hope that doesn’t hold true for “colonial children,” including the Cayman Islands, in the context of England’s protracted separation from the European Union, known commonly as “Brexit.”
When the EU opted to place Cayman and 46 other jurisdictions on a financial “graylist” – as opposed to an outright blacklist – in December, we thought the issue was put to rest … at least for a time.
But now comes word from the U.K.’s Independent newspaper that EU officials may attempt to use United Kingdom territories, including Cayman, and the threat of blacklisting as leverage in upcoming Brexit trade negotiations.
The newspaper quotes an unnamed “Brussels source”: “The question is ‘would the Government of Britain want to put itself in a position where it runs counter to the public’s position on tax havens, in which companies can base themselves in and pay a smaller proportion of tax than they should be?’”
Frankly, Britain damned well better. Certainly British territories have obligations to their sovereign, but the obverse is also true: England as sovereign also has responsibilities to her territories.
Last year, with some assistance from London, Cayman managed to avoid the EU’s blacklist of “non-cooperative” jurisdictions, after Premier Alden McLaughlin and local government officials committed to make as-yet-unspecified changes to meet EU criteria regarding “fair taxation” and “economic substance.”
The details of any promises made have never been disclosed publicly, but, if they exist, they must be shared with the Cayman people. Transparency is best, translucency is next best, but opacity is simply not acceptable.
In fairness, our own government officials may not know with precision what Cayman is expected to do to mollify the EU bureaucrats. The Brussels discussions may have been preliminary and fallen short of actual “agreements” and “commitments.”
We should know more when government officials return from their upcoming meeting with the EU and the Organisation for Economic Co-operation and Development.
But all of Cayman’s efforts, whether abroad or on-island, may prove for naught, should the U.K. decide to treat Cayman as a mere bargaining chip during Brexit discussions.
While Cayman celebrates British holidays, features the Queen on our currency, enjoys access to the U.K. high court and has a British-appointed governor, our relationship with England may not extend to the combination lock on the exchequer’s vault.
This observation has been put to the test on many occasions, for instance Hurricane Ivan in 2004 (no material support despite the fact that much of our island was in shambles), the execution of U.K.-initiated Operation Tempura (Cayman received, and paid, a U.K. “invoice” for well over $10 million), the ongoing costly quagmire of Cuban migrants, and, recently regionally, the U.K.’s much-maligned disaster relief efforts to our sister territories devastated by hurricanes Irma and Maria.
In brief, a primary rule underpinning the U.K.’s colonial relationships may be that Britain is willing to offer guidance, assistance and support, but is far more restrained when called upon to make substantial political or financial commitments.