EDITORIAL – EU ‘blacklists’: Raise the Cayman flag, not the white flag

In a previous editorial, we called on Cayman Islands leaders to defend our country’s reputation and economy against the assault launched by the Netherlands in the form of a “blacklist” that included Cayman and other offshore centers.

Our government’s characteristically tepid response, consisting largely of mealy mouthed mutterings about “regret” at the “unfortunate” act of Dutch aggression, was not what we had in mind.

Enter, thankfully, economist Richard W. Rahn, who in the opinion column adjacent to this editorial strikes forceful rhetorical blows against “bullying” governments’ attempts to dictate the domestic affairs of smaller jurisdictions.

Mr. Rahn gets to the heart of the matter, writing, “Powerful countries in centuries past would conquer poorer countries and then exploit their resources as a form of tribute. In the modern world, the language has been adulterated to make it sound as if the exploiters are the victims of the poorer countries – when the truth is quite the opposite.”

Observe, for example, which countries inevitably escape the various blacklists peddled by European bureaucrats, regardless of their records on supposedly hallowed issues such as “transparency,” “tax evasion” and “anti-money laundering standards”: the United States, China, Singapore, Switzerland and, of course, members of the European Union.

Instead, these self-proclaimed “tax police” traffic tired stereotypes of shady Caribbean “tax havens” and attempt to marginalize and further demonize jurisdictions, such as Cayman, that in reality go to great extremes to implement policies according to the dictates du jour from powerful entities such as the EU, U.K. and OECD, nominally to combat a revolving lineup of bogeymen, including tax evasion, money laundering, terror financing, etc.

We would challenge the Netherlands, or any of the countries named above, to subject themselves to the same level of intense scrutiny levied upon Cayman. They will never do it, which is prima facie evidence of the hypocrisy afoot in their pious proclamations. Likewise, they will never prove, or even cite evidence, that their comparatively massive economies are somehow being harmed, and not helped, by the tax policies of Cayman or other small territories they have singled out for disapprobation. They will not, because they cannot, because the evidence simply does not exist.

By normal economic calculations, the European Union is largely a collective of failing – and nearly bankrupt – debtor nations with the arrogance to attempt to export their socialist ideals to successful capitalist economies, such as the Cayman Islands.

We continue to be disturbed by the naiveté being exhibited by Cayman’s political leaders as they continue to accede to the always-mutating foreign demands put forward by Euro-Socialists whose extortionate weapon of choice increasingly has become the threat of being listed on one of their so-called “blacklists.”

Fresh off a historic capitulation to EU mandates on “economic substance” legislation (followed swiftly by the Netherlands’ punch to Cayman’s gut), Premier Alden McLaughlin, Minister for Financial Services Tara Rivers, Attorney General Samuel Bulgin and other officials are heading off on yet another globe-trotting expedition to far-flung metropolises to attempt to convince foreign officials that Cayman is not the mortal enemy that they continue to insist we are.

This time, Premier McLaughlin and his delegation are traveling to London, Brussels, Paris, Berlin and New York to discuss, according to a government press release, Cayman’s “continued efforts to meet international standards for the Financial Services Industry.” (We presume they are referring to the aforementioned “economic substance” bill passed by the Legislative Assembly late at night in late December, the practical details and consequences of which have still not been shared with the local citizenry.)

Mr. Rahn writes, “The smartest people on the planet go to work in the tech companies, not in the tax departments of government – and that fact will ultimately protect economic opportunity and individual liberty.” … That doesn’t necessarily mean in Cayman.

Our leaders may feel they are protecting Cayman’s economy by continually accommodating foreign entities that are openly hostile to Cayman’s interests, but as restrictive and oppressive regulations accumulate, so do incentives for Cayman’s private investors and companies to take their global business elsewhere.

1 COMMENT

  1. A Caymanian friend has had a home and a bank account in Spain for many years. Also a EU member.

    Last year, without warning, the Spanish bank closed his bank account. The reason being it was the banks policy not to accept funds from the Cayman Islands.

    Of course I agree with your article. But how exactly do we prevent the EU squeezing us out of existence?

Comments are closed.