The U.K. government will formally respond in the coming weeks to proposed constitutional safeguards made by the Cayman Islands government.

Both held talks about changes to the Cayman Islands constitution at the Foreign and Commonwealth Office in London on Friday and Monday.

The Cayman Islands sought these discussions after the House of Commons and later the House of Lords passed the Sanctions and Anti-Money Laundering Act in May. The new law included a clause that threatens to implement public registers of beneficial ownership in the British Overseas Territories through an order in council, if they had not been established voluntarily by Dec. 31, 2020

Because financial services are a devolved area of policy, the step not only breached convention but also disenfranchised the lawmakers and the electorates in the territories, who have no voting rights in the U.K. and are not represented in the U.K. Parliament.

As such, the move might constitute a constitutional overreach by the House of Commons.

“Responsibility for domestic policy has been devolved to the territories under the terms of their respective Constitution Orders made by Her Majesty in Privy Council,” government said in a press release. “Contrary to long-standing convention the U.K. Parliament sought to legislate for the territories in an area of devolved responsibility by attaching an amendment to the Sanctions and Anti Money Laundering Bill that was making its way through the United Kingdom Parliament.”

Government said the concern is, therefore, not just about beneficial ownership registers, but about what other areas of devolved authority the U.K. Parliament may feel it should interfere in without at least consulting with the Cayman Islands.

Premier Alden McLaughlin, Lord Tariq Mahmood Ahmad and Leader of the Opposition Ezzard Miller.

The Cayman Islands is seeking safeguards that will confirm that its government has autonomous capacity in respect of domestic affairs, and that the U.K. will not seek to legislate, directly or indirectly for the Cayman Islands without consultation.

 

Before the meeting, the Cayman Islands government provided the FCO with proposed constitutional changes in draft form. These proposals had the backing of the opposition and formed the basis for the discussions.

In addition to addressing the main concern, the talks were used to seek a small number of administrative changes to the current Constitution Order to improve the operations of the local government and legislature.

During the talks, many of the proposed changes were agreed in principle, while some are still under consideration by the U.K.

“U.K. officials listened and genuinely sought to be helpful whilst asserting that the U.K.’s interests and its ability to ultimately legislate for its territories must remain paramount,” the government said.

Deputy Leader of the Opposition Alva Suckoo said, “I believe that while there was some resistance to some of the proposals put forward by the team, we managed to achieve a number of significant changes which will preserve and define the Cayman Islands autonomy in domestic affairs.”

Britain will formally respond in the coming weeks with a Draft Order in Council that will confirm the matters already agreed in principle and provide proposals on how to address the matters that were left to be considered.

Once agreed, the results of the negotiations will be published and debated in the Legislative Assembly. If approved by the Legislative Assembly and subsequently by Her Majesty in Privy Council, the proposed changes are expected to come into effect in time for the 60th anniversary constitutional celebrations in 2019.

In addition to Premier Alden McLaughlin and ministers Joseph Hew and Tara Rivers, Attorney General Samuel Bulgin, Opposition Leader Ezzard Miller and Mr. Suckoo participated in the talks. They were joined by government’s constitutional advisor in London, Sir Jeffrey Jowell, QC.

The U.K. team included the constitutional advisor to the FCO, Ian Hendry; Ben Merrick, director of the Overseas Territories; Will Gelling of the FCO; and Greg Reisman, assistant legal adviser to the FCO. Cayman Islands Governor Martyn Roper also attended. Lord Tariq Ahmad, minister for the overseas territories, opened the talks on Friday and returned for the closing session on Monday.