Cayman Islands Premier McKeeva Bush said Thursday that a provision in a pending legal document governing the relationship between the European Union and the overseas countries and territories would seriously damage the financial services industry in the Cayman Islands.
Speaking to members of the European Commission during a meeting of the Overseas Countries and Territories Association in Greenland, Mr. Bush pressed for change to Article 70 of the draft Overseas Association Decision document of the European Union, which calls for convergence with EU legislation of the financial services regimes in the overseas jurisdictions with regard to supervision, transparency, tax information exchange and anti-money laundering.
This would require that the Cayman Islands bring its laws on financial services in line with EU legislation. Premier Bush has opposed this measure since it was initially introduced in the draft version of the document.
The premier said it was due to what he deemed to be the possible dangers posed in the draft document that he and his delegation travelled to Greenland, according to a news release issued by his press secretary. Mr. Bush did not elaborate in the release on the nature of those concerns.
The document is in an advanced stage in the revision process and will lead to a new arrangement coming into effect in January 2014. Mr. Bush said the Cayman Islands and other territories with significant financial services interests hope for the support of the United Kingdom government as the matter goes to the Council of the European Union for finalisation.
The Cayman Islands is often referred to as the fifth-largest offshore financial services centre in the world, with its leading sectors including hedge fund formation and investment, structured finance and securitisation, captive insurance and general corporate activities.
“Cayman’s current regulatory regime is compliant with robust international requirements, providing a strong foundation element to attract investment that is safe in our jurisdiction,” Mr. Bush said. “Those investments in turn fuel growth of the world economy.”
Article 70 of the document aims at regulatory convergence in financial services in terms of supervision, transparency, tax information exchange and anti-money laundering.
It states that both the EU and overseas territories shall promote regulatory convergence with recognised international standards on regulation and supervision in financial services, including the:
- Basel Committee’s core principles for effective banking supervision;
- International Association of Insurance Supervisors’ “Insurance Core Principles”;
- International Organisation of Securities Commissions’ “Objectives and Principles of Securities Regulation”;
- OECD’s “Agreement on exchange of information on tax matters”;
- G20 “Statement on Transparency and exchange of information for tax purposes”;
- Financial Stability Board’s “Key Attributes of Effective Resolution Regimes for Financial Institutions”;
- Financial Action Task Force’s “Forty Recommendations on Money Laundering and Terrorist Financing”.
Article 70 further notes the EU and the overseas countries and territories shall promote convergence of overseas countries and territories legislation with EU legislation on financial services.
The overseas countries and territories are 25 countries and territories – mainly small islands including Cayman – outside mainland Europe, having constitutional ties with one of the following member states: Denmark, France, the Netherlands and the UK. Although their nationals are in principle EU citizens, these territories are not part of the EU and not directly subject to EU law.
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Many of Caycompass’s readers in Cayman will not understand fully the implications of this edict from the EU…and I’m not completely certain that McKeeva Bush does either.
If he did, he would not be doing everything possible to alieniate the Cayman Islands from the United Kingdom, especially at this time.
Bush and Cayman needs to understand that this ‘cowboy, go-it-alone’ stance that Bush has adopted is driving Cayman away from it biggest protector from the EU, which is the United Kingdom.
David Cameron openly and fully rejected any further involvement and interference from the European Union in Britain’s fiscal and financial affairs at the last major EU conference…with the full support of the majority of British voters support…we want NO MORE EU involvement or laws in our lives and this Coalition Govt made that quite clear to the EU.
This very edict was the one that Britain has totally rejected and if the majority of Britain’s voting population get our way, we will pull Britain out of the EU altogether; moves are already afoot to drive the move to bring a national referendum on the issue at some future date, once the political heirarchy fully supports getting the referendum before the population.
McKeeva Bush needs to step off out of Cayman’s political life and let other, more educated and in-tune people take up the reigns of leading Cayman.
His days of confrontational politics is so out-of-date and obsolete…and destructive…
That it makes the dinasours look modern, in comparison.
The urgency and usefulness of making a trip to address a group that no one listens to might have been more palatable if accompanied by someone, or even a statement from someone, in the financial services industry.
Wonder if his speech was 3 hours long including 18 slides?
I like your comments Fiery and agree with most of it. But I don’t think we’ll see the UK pull out of the EU altogether like you suggest. The recent polls show that as long as we get the chance to control our own legislation and pass our own laws then we’re more likely to stay in. It will never be a perfect relationship and maybe we don’t always want to follow the ‘house rules’ with them, but better to have them around than be all on our own. Maybe there is a lesson for the Cayman Islands to consider here.