The Cayman Islands came away with no promises on constitutional change following Lord Tariq Ahmad’s brief visit Wednesday, but the British Overseas Territories minister said any proposals made by Cayman would be given due consideration.
In the wake of a May 1 vote at the British House of Commons, Premier Alden McLaughlin said he would propose changes to Cayman’s governance relationship with the U.K., seeking to eliminate Britain’s ability to legislate directly for its territory in matters of local concern.
Section 125 of Cayman’s Constitution Order, 2009 reads: “There is reserved to Her Majesty full power to make laws for the peace, order and good government of the Cayman Islands.”
Lord Ahmad said Wednesday that the section, generally referred to as the U.K.’s “reserved powers,” was noted as an important feature in previous agreements between the U.K. Foreign and Commonwealth Office and the remaining overseas territories.
“[The reserved powers] are a starting point for the U.K.,” Lord Ahmad said. “We have yet to see a detailed proposition, but different territories are in a different place … and there is no one-size-fits-all.
“If there are issues [the territories] wish to raise about the constitution, we will look to address them,” he said.
Concerns about the U.K.’s ultimate power to force legislation upon Cayman and other territories never fully dissipated over the past few decades, but these were brought into sharp relief again following the May 1 vote in which the U.K. House of Commons approved a measure that is expected to have a significant impact on Cayman’s financial services industry.
The House approved amendments to the U.K. Sanctions and Anti-Money Laundering Bill which require British Overseas Territories – but not Crown Dependencies – to implement a public register of company ownership by Dec. 31, 2020. If that is not done, the U.K. Secretary of State is required to draft orders in council to force the public register upon the territories.
Premier Alden McLaughlin has said any attempt to implement this in Cayman will be challenged in the local courts. However, the ultimate court of appeal for Cayman and the rest of the territories is the U.K. Privy Council in London. Lord Ahmad said Wednesday that he did not want to comment on pending litigation, but urged everyone to keep calm in the wake of a parliamentary vote that the current U.K. government administration did not agree with.
“This is a time for calmness to prevail,” he said. “You cannot say that parliament is sovereign and then not accept its decision. It was not something that we as the British government wanted, but at the same time the parliament has voted as such.”
Cayman Finance Chief Executive Officer Jude Scott acknowledged that a public beneficial ownership register would not be the “death knell” of the local financial services industry, a sentiment with which Lord Ahmad agreed. The U.K. Lord also believed it was not the end of Cayman’s relationship with Britain.
“Cayman is very much open for business,” Lord Ahmad said. “There’s a very deep and established financial industry here in Cayman, and it shouldn’t just be looked at in the light of just one decision.”
The Lord of Wimbledon also hinted that there could be a bit of negotiating to do around the actual implementation of the order in council set for December 2020.
“There are details to be worked through, and we will work collaboratively to find a solution that works for our overseas territories and that also reflects and upholds the decision of the British parliament.”