The government was not blind-sided by criticisms levelled at its off-shore banking by the OECD, Leader of Government Business Kurt Tibbetts has insisted.
Reporting on a recent trip to the 10th meeting of the Overseas Territories Consultative Council in London by a Cayman eight-member delegation, Mr. Tibbetts and fellow team members met with key players in the UK Treasury to discuss the OECD member states’ attitude in the wake of the global finance crisis.
‘The Cayman Islands were commended for the progress we have made in developing a robust, effective anti-money laundering and counter terrorism financing regime and were encouraged that the UK is keen to hold another round of talks with the Cayman Islands early next year with a view to reaching agreement on tax information exchange,’ Mr. Tibbetts said.
He said: ‘There has been quite a bit of commentary both from the OECD and locally about moves by the OECD to revert to a listing exercise – a ‘green list’, in fact, not a ‘black list’ – and what this might mean for Cayman.
‘Firstly, we need to understand that this is not localised ‘OECD weather’: this is reflective of the overall operating climate generated by the recent period of global financial turmoil. I say that to say this: your government knows that Cayman’s positioning has to take account of the big picture – and a picture, which is still emerging,’ Mr. Tibbetts said.
He added: ‘Secondly, it needs to be understood that the government is not blind-sided by OECD developments — in fact, quite the opposite: we have been active participants in the OECD exercise since 2000, in particular as a member of the OECD subcommittee, known as the ‘level playing field sub-group’ whose work is ongoing and has direct input on OECD developments in the area of transparency and exchange of information in tax matters.’
He said this was part of the government’s policy of constructive engagement, the other element being bilateral discussions with OECD member states about cooperation arrangements specific to the tax area.
He said the government intended to continue its policy of constructive engagement.
The team also met with the new UK Minister for Overseas Territories, Gillian Merron, who was appointed to the post last month, taking over from Meg Munn.
Mr. Tibbetts said the delegation met her twice, once at the OTCC meeting she chaired and on a one-on-one basis through a series of bilateral meetings outside of the conference.
‘I had a brief, but most productive bilateral with Minister Merron. It was essentially a get-to-know-you meeting. Both myself and Minister McLaughlin brought her up-to-date on issues of specific interest and concern to the Cayman Islands.
‘We listened to her perspective on these issues and briefly examined possible ways forward. I came away quite satisfied that the basis of a good working relationship had been established,’ he said.
Among the items discussed at the OTCC meeting was an agreement that next year’s conference would include a separate forum to review progress of constitutional modernisation in overseas territories.
Also discussed was the modernisation of overseas territories’ relationship with the European Union, a subject that will be further discussed later this month when the Cayman Islands host the EU/Overseas Countries and Territories Forum.
Mr. Tibbetts said: ‘The UK sees modernisation of relations between the overseas territories and the EU as an integral part of the UK’s strategy to manage specific challenges which globalisation presents for UK overseas territories.’
Mr. Tibbetts said there was considerable discussion in relation to the financial services industry and said it was agreed that the UK and overseas territories would cooperate to develop and deliver a Financial Services Strategy aimed at supporting effective regulatory and law enforcement systems.
‘The idea is to combat money laundering, terrorist financing, corruption and bribery in keeping with international standards. The issue of Tax Information Exchange Agreements with the UK and other OECD member countries was discussed and the UK offered to assist the overseas territories to stay informed of progress on EU and other international agreements relating to financial services,’ Mr. Tibbetts said.
Mr. Tibbetts said he had appeared before the Foreign Affairs Committee along with other heads of government and discussed a number of issues arising from their recent report on the Overseas Territories.
They also met with some key players in the UK financial services sector. ‘This was a very useful exercise in that it provided an opportunity for us to gain perspective on how the Cayman Islands are perceived by this important sector, particularly in light of the present global financial circumstances.
‘Generally speaking, impressions of Cayman the services and the products we offer are good.’
But he added that members of the financial services industry had raised concerns about ‘the cloud of uncertainty and instability which hangs over our law enforcement and judiciary as a result of certain actions taken over the last nine months. Questions raised in London clearly indicate that key players are watching and are concerned about these developments.’
While the discussions were being undertaken in London, the Judicial Review proceedings brought by Mr. Justice Henderson challenging a police search of his office and home was determined in his favour when the presiding judge quashed the search warrant.
‘It needs to be understood that the government is not blind-sided by OECD developments — in fact, quite the opposite: we have been active participants in the OECD exercise since 2000, in particular as a member of the OECD subcommittee, known as the ‘level playing field sub-group’ whose work is ongoing and has direct input on OECD developments in the area of transparency and exchange of information in tax matters.’
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