Premier Alden McLaughlin has said that, based on assessments, Britain’s exit from the European Union will have little direct impact on the Cayman Islands, but may present an issue for financial services.
“We do anticipate that with the [UK] no longer providing a voice of advocacy and balance around the EU table, there could be some challenges in terms of ensuring there is a level playing field and fair consideration of the Cayman Islands’ efforts as it relates to EU-driven financial services initiatives,” he told the Legislative Assembly Friday.
McLaughlin said the Ministry of Financial Services has been increasing its direct engagement with the EU for the past few years.
“It has done this with the knowledge that the UK will soon not be around the EU table to speak on behalf of Cayman Islands’ Financial Services industry. CIG have been working closely with colleagues in UK government to get us in the best position ahead of 31 January 2020. The UK has undertaken that it will also find other ways through bilateral lobbying to support the Cayman Islands going forward,” he added.
Despite this, McLaughlin told legislators the exit has the potential to bring with it many opportunities for Cayman and the UK to further enhance their constitutional and historical links.
“One example of how the Cayman Islands government has taken steps to maximise these opportunities is the creation of the Ministry of International Trade, Investment, Aviation and Maritime Affairs in 2019, which will advance the economic and political interests of the government, local business community, and the Caymanian people. The purpose of this ministry is to assist with enhancing the reputation of the Cayman Islands and making it easier for potential overseas investors to do business in the Cayman Islands,” McLaughlin said.
Britain commenced its separation from the EU on Friday, officially departing at 11pm UK time, midnight in Brussels.
The departure comes 3½ years after the country voted by a margin of 52%-48% to walk away from the club that it had joined in 1973.
This is the first time a country has left the EU. In Brussels, EU Commission President Ursula von der Leyen lamented on Friday that “as the sun rises tomorrow, a new chapter for our union of 27 will start”.
Friday’s departure will also herald the beginning of an 11-month transition period for the UK.
McLaughlin said an analysis of the amount of trade that various local sectors conduct with the EU found that direct trade with EU members states is minimal.
“Therefore, there are no obvious impacts on the Cayman Islands economy and little cause for concern in this regard,” he said.
As far as travel within the EU is concerned, the premier said, Cayman Islands passport holders (i.e., British Overseas Territory Citizens) have enjoyed visa-free travel for up to 90 days within the Schengen area since 2014.
“The arrangements with the EU for those travelling on BOTC passports are not contingent on the UK’s membership of the EU. As it relates to the right of Caymanians who are British passport holders to live and work in EU countries, we will have to wait and see the final results of the negotiations between the UK and the EU following 31 January 2020,” he said.
For the Cayman Islands and other British Overseas Territories, the transition period and the exit of Britain has left a cloud of uncertainty.
However, Overseas Territories Minister Lord Tariq Ahmad, in a statement Thursday, made it clear that a priority for him, and for the UK government, “has been to work closely with Territory leaders to identify the opportunities and concerns in each OT associated with Brexit”.
He added in his statement, “I want to both assure you and to leave you in no doubt that the United Kingdom is absolutely committed to the safety and prosperity of each of our British OTs. Brexit is no exception to this.”
Ahmad said during the implementation period OT citizens’ rights will not change, and neither will the relationship OT companies and non-government organisations have with the EU.
He stressed that eligibility criteria for British passports of all types will not be affected by the departure from the EU. Additionally, the rules on travelling to the EU will remain the same throughout the implementation period.
“This means British Citizen passport holders will be able to continue to live, work and study in the EU as they do now. The rights of British Overseas Territory Citizen (BOTC) passport holders, including 90-day visa-free access to the Schengen area in any 180 days, will also not change, either during the implementation period or afterwards,” he added.
As for EU funding, Ahmad said, the UK government had agreed to cover EU-funded projects in the OTs if the EU were to cease payments.
However, he said, “as part of the Prime Minister’s deal, there is no longer any risk of this: projects in the OTs under these funding streams will continue to be covered by the EU for their duration”.
The Schengen area countries are the following: