Premier Alden McLaughlin has said the European Union’s blacklisting of the Cayman Islands remains “a source of major worry and concern” for him, especially with the economy now heavily reliant on the financial services industry.
McLaughlin, responding to queries from the Cayman Compass on Thursday about local efforts to have Cayman removed from the blacklist, said, “We absolutely must come off that list in October. If not, I think there will be some dire consequences to follow which we must avoid at pretty much all costs.”
In February, the EU added the Cayman Islands, together with Palau, Panama and the Seychelles, to its list of non-cooperative tax jurisdictions at a meeting of the bloc’s finance ministers.
This came as a blow to government, given the efforts undertaken to pass a number of bills to address areas that were flagged by the EU and other legislative changes that were in progress at that time.
McLaughlin said this week a number of bills have been published from the financial services ministry dealing with a range of areas from virtual assets across the board.
“Almost all of those are dealing with aspects of concerns that were flagged up with respect to both the FATF (Financial Action Task Force) and the CFATF (Caribbean Financial Action Task Force) situation as well as the EU blacklisting,” he said.
The premier said that “work is proceeding a pace” with respect to those efforts even as the government deals with the COVID-19 health crisis.
He said government will most likely have to hold a meeting of the Legislative Assembly later in the month to consider the bills that have been gazetted.
Those bills are the Virtual Asset (Service Providers) Bill, 2020; the Monetary Authority (Amendment) (No.2) Bill, 2020; the Securities Investment Business (Amendment) Bill, 2020; the Mutual Funds (Amendment) (No. 2) Bill, 2020; and the Stock Exchange Company (Amendment) Bill, 2020
The new legislative framework, according to a Financial Services Ministry statement proposes a flexible foundation that promotes the use of new technology and innovative enterprise in the jurisdiction, while complying with newly adopted international standards set by the FATF.
“The new regulatory framework would provide for the supervision of persons and entities facilitating virtual asset activities as a business. In the Cayman Islands, a virtual asset is defined as a digital representation of value that can be electronically traded and used for investment purposes. An example of a virtual asset is a cryptocurrency, such as Bitcoin,” it said.
Financial Services Minister Tara Rivers, in that statement said, the legislative enhancements “are designed to increase the jurisdiction’s attractiveness as a domicile for virtual assets business while ensuring Cayman meets international obligations.”
Four more pieces of legislation will be gazetted and later debated in the LA to enhance Cayman’s AML/CFT/CPF regime as the Caribbean Financial Action Task Force (CFATF) continues its review of the jurisdiction’s legislative and regulatory framework, the ministry added.