Opposition and industry representatives have expressed support for the government’s ongoing dialogue with the European Union and efforts to have Cayman taken off a list of uncooperative tax jurisdictions.
The EU council of finance ministers confirmed Cayman’s inclusion on the tax list on Tuesday, stating that it had not implemented promised tax reforms by the agreed deadline.
Legislators amended the Private Funds Law and the Mutual Funds Amendment Law at the end of January, but those laws came into force on 7 Feb, three days after the cut-off date set by the EU.
Bodden Town West MLA Chris Saunders said he is “deeply concerned and saddened” that Cayman finds itself in this position.
“Like many, I too have questions regarding the actions or inactions that led to this blacklisting by the EU. As previously stated, the primary focus at this time is to not find blame but rather that we all work together to restore Cayman’s well-earned reputation as a highly regulated jurisdiction that is a good place to do business.”
Saunders said it was important for the government to provide an update to the public on how Brexit is impacting the way Cayman conducts business, trade and travel with the EU.
Cayman Finance, the umbrella organisation representing the financial services industry, said in a statement that it fully supports the actions taken by the Cayman Islands government to constructively engage with EU officials to have Cayman removed from the list.
Cayman Finance CEO Jude Scott said Cayman’s track record of meeting evolving global standards is expected to continue. “As an organisation, we stand ready to work with government, as it sees fit, as it cooperates with the EU to be removed from the list. We anticipate this decision will happen in the not-too-distant future.”
Scott said Cayman has already introduced enhanced oversight of investment funds in response to the EU and other standard-setting bodies.
“Just as approximately 30 other jurisdictions were removed after taking the necessary actions, we look forward to the same happening with regard to the Cayman Islands. In the meantime, clients can continue to expect the usual high professional standards from their Cayman service providers that they have always received,” Scott added.
He noted Cayman has adopted at least as many global standards for transparency as any G20 country and proactively shares tax information with more than 100 countries under the OECD Common Reporting Standard.
The Cayman Islands Directors Association said it was “obviously disappointed” by the EU decision to include Cayman on the tax list. “CIDA, along with other private sector organisations, [has] worked tirelessly along with the government, to devise and implement relevant and effective legislation,” CIDA said.
“As one of the world’s leading financial centres and a domicile of choice for investment funds, we are committed to continued cooperation and engagement on this issue. We remain optimistic that there will be fair play and proper recognition of the steps which have been and continue to be taken, to address the EU’s concerns.”
STEP Cayman Islands added that it “supports the work of the Cayman Islands government and its resolve to continue to engage with the EU to ensure that Cayman is removed from the EU list of non-cooperative jurisdictions with all haste”.
Cayman International Insurance said the “technical listing” would not impact or hinder Cayman-based international insurers and reinsurers in supporting their clients.
“Internationally recognised standards for regulation will continue to be met and we are confident that recent legislation passed by the Cayman Islands government will be affirmed as meeting the required standards and will lead to our removal from the listing at the next possible opportunity,” the insurance managers association said.
Cayman Islands Institute of Professional Accountants CEO Sheree Ebanks said her organisation fully supports the government’s efforts towards delisting.
“CIIPA is committed to continue to work with government to overcome the technical issues that led to the EU’s decision, and with the excellent public sector-private industry collaboration will be removed from this list at the earliest possible opportunity,” she said.