EDITORIAL – Betrayal!

Big Ben and the Houses of Parliament in Westminster Palace in London. Members of Parliament passed an amendment to the Sanctions and Anti-Money Laundering Bill on Tuesday that will require Cayman and other British Overseas Territories to create public beneficial ownership registries.

It was a political plot worthy of Shakespeare – no, Machiavelli – pens dipped in a toxic alloy of deception and deceit.

While Cayman and its elected leaders slept during the early morning hours of May 1, a cabal of British politicians gathered with the explicit intent of doing great harm to these Cayman Islands – the very islands which, through tradition and law, they are entrusted to protect.

These were little men – not only in political stature, but especially in character – small actors playing out their roles on the grandest of stages – the Palace of Westminster in London.

What they did constitutes an act of betrayal unworthy of the once-great country they represent.

For the benefit of latecomers to this drama, we strongly advise that they read carefully the story on this page below this editorial. It recounts in considerable detail the secretiveness and the sleaziness of our British brethren as they willfully and maliciously conspired against their own territories, Cayman foremost among them.

What is important, but not yet widely known, is that Cayman’s leaders, including our premier, had an understanding with U.K. leaders that any legislation going forward would treat our competitors in the financial services industry “equally.”

Without notice, debate or discussion, British MPs broke that pledge, exempting their “dependencies” (in effect, giving sanctuary to Jersey, Guernsey and the Isle of Man) while punishing the British territories in the Caribbean by forcing them, under threat of imposing their will via an “order in council,” to reveal publicly (think Google) the ownership of companies within their jurisdictions.

In other words, Parliament’s actions are particularly helpful to their nearby dependencies and particularly harmful to their faraway territories, especially those such as Cayman, Bermuda and the British Virgin Islands, whose economies are dependent on their financial service industries.

Further, in a particularly galling statement, the U.K. has declared that it plans to promote and promulgate “public registers” as the “global standard.” That’s an ambitious undertaking since, to date, the U.K. is the ONLY country in the world with a “public registry,” which, importantly, comprises unverified information, meaning it is practically worthless. Britain’s task is as fanciful as it is impossible: The “major players,” such as the United States, Russia and China, would never open their records to such regulatory (and tabloidy) voyeurism.

Nevertheless, to spread this legislative virus, the U.K. hopes to join with international monetary and regulatory bodies, including the OECD – a mortal enemy of offshore centers and, particularly, the Cayman Islands.

When Jesus was on the cross, he stated benevolently, “Father, forgive them for they know not what they do.” No such claim can be put forth for the U.K. parliamentarians. They knew exactly what they were doing. Sir Alan Duncan, MP with responsibility for the Foreign and Commonwealth Office, warned that the vote would “disenfranchise” the elected representatives of Britain’s Overseas Territories and would “potentially damage their long-standing constitutional relations.”

On first view, there are two obvious “victims” of Parliament’s perfidy in the Cayman Islands:

  • First, our offshore financial industry itself.
  • Second (and far more consequential), our ongoing relationship with the United Kingdom.

It is too early to assess the potential damage to our financial industry, but it is not too early to recognize that the most sacred component binding Britain and the Cayman Islands – trust – has been grievously, cavalierly and purposely breached. It is not unlike a caregiver who becomes an abuser.

It is a credit to the people of these islands that their reaction to such Parliamentary infidelity has been swift and unequivocal. Perhaps Premier Alden McLaughlin, speaking first, spoke best and spoke for all:

“The actions of the House of Commons in seeking to legislate for the Cayman Islands amounts to constitutional overreach, and are reminiscent of the worst injustices of a bygone era of colonial despotism.”

The path forward for these islands is at this early moment uncharted and unsettled. What is evident, however, is that perhaps now more than any time in our 500-plus-year history, these islands are in need of a leader to unite us and guide us along our upcoming journey.

That leader may well be our premier, or perhaps someone who has yet to emerge. Perilous times historically have engendered leaders from the most unlikely of places.

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  1. How can it be ‘betrayal’ when it will bring CI into line with the UK?

    The only answer is that the people of CI wish to continue to be attractive to those investors with a need for privacy and who like a non-tac regime because this insulates them from the reality of actually paying for their way of living.