A Cayman government delegation finished a series of more than a dozen meetings in Belgium, France and Germany last week before heading to New York to attend the Cayman Finance Breakfast Seminar.
Premier Alden McLaughlin, Minister of Financial Services Tara Rivers, Attorney General Samuel Bulgin and the Cayman delegation met with members of the Cabinets of Pierre Moscovici, the EU Commissioner for Economic and Financial Affairs, Taxation and Customs; and Valdis Dombrovskis, EU Commissioner for Financial Services and Capital Markets.
The delegation also met with Emer Traynor, deputy head of unit at the Director General of Taxation and Customs Union and representatives of the European Union Code of Conduct Group, including the group’s chair Fabrizia Lapecorella, who joined by telephone.
The Code of Conduct Group is charged with assessing jurisdictions to determine whether they potentially have tax regimes that are harmful to EU member states.
The discussions focused on the commitments made by the Cayman Islands and the jurisdiction’s intention of continuing to meet all international global standards. This included Cayman’s recently passed legislation to address any concerns over a lack of substance of companies that are tax-resident in Cayman.
Ms. Lapecorella noted that she was aware of the excellent cooperation and engagement by the Cayman Islands, the Premier’s Office said in a press release.
Cayman’s new substance legislation, and that of other offshore financial centers, is still being assessed by the Commission.
The Code of Conduct group on business taxation is scheduled to discuss the substance measures passed by low-tax jurisdictions, during its next meeting on Jan. 30.
If the measures are deemed insufficient, jurisdictions could be blacklisted ahead of EU finance ministers’ meeting on Feb. 12.
“Whilst the EU delegation were not at this stage able to provide any insight on whether the Cayman Islands had passed muster and would avoid being blacklisted, they did not mention anything glaring that has so far concerned them,” Premier McLaughlin said.
“However, we are taking no chances. The extensive engagement throughout the week in Europe, at the EU level as well as with representatives of several member states, including the influential French and Germans, was important to help ensure that those in the EU Commission, and in some Member States, who decide on these things, or who make recommendations to the decision makers, understand fully that we take our role as an international finance center seriously and that we will continue to adhere to the evolving international standards. It also assisted in a better understanding on where some states were in their thinking,” he said.
In Brussels, the delegation also met with the permanent representatives of Austria, Belgium, Cyprus, Hungary, Luxembourg, the Netherlands, Romania and Spain.
In the meeting with the Netherlands, the premier and minister raised concerns regarding the blacklist that was recently issued by the Netherlands government, in particular the lack of engagement before the list was published, and the rationale for including the Cayman Islands on the list.
In France, Cayman’s government held talks with Gael Perraud, deputy director of International Taxation and European Affairs, as well as with senior representatives of Secretariat General on European Affairs. The Secretariat is a department of the prime minister and deals with several matters including taxation and the OECD.
“We have been directly engaging with the EU for almost two years, both at the technical as well as the political level, including some five visits by myself to Brussels and three for the premier,” Minister Rivers said. “We have worked with financial services partners at home in crafting the legislation, and I am proud of the work we have done and for the support of Industry. In addition, we have consulted with the EU along the way to ensure that the elements that they were seeking to be in legislation were present. In short, we are collectively doing what we can to maintain a vibrant financial services business for years to come,” she said.