ESTABLISHED 1965 www.caymancompass.com – 50 CENTS – WEDNESDAY DECEMBER 6, 2017 Cayman sidesteps European financial services blacklist MICHAEL KLEIN mklein@pinnaclemedialtd.com After weeks of media fanfare, coinciding with the release of the Paradise Papers, and political horse trading behind the scenes, the EU has released a list of 17 countries it considers uncoopera- tive in tax matters. After a meeting in Brussels on Tuesday, EU finance minis- ters said American Samoa, Bah- rain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Is- lands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trin- idad and Tobago, Tunisia and the United Arab Emirates had not done enough to crack down on tax evasion and avoidance schemes. The Cayman Islands and other U.K. overseas territories and Crown dependencies are not in- cluded on the blacklist but find themselves on a so-called com- mitment list. This graylist con- tains another 47 countries and jurisdictions that have made com- mitments in writing to meet the EU criteria applied to the pro- cess of singling out countries for their lack of tax transparency and “tax fairness.” Another eight Caribbean juris- dictions – Anguilla, Antigua and Barbuda, the Bahamas, British Virgin Islands, Dominica, Saint Kitts and Nevis, Turks and Ca- icos Islands, and the U.S. Virgin Is- lands – affected by this year’s hur- ricanes will be assessed by the MICHAEL KLEIN mklein@pinnaclemedialtd.com The EU has not blacklisted the Cayman Islands as uncooperative in tax matters. But Cayman’s in- clusion on a graylist of countries that have prom- ised to address certain deficiencies by the end of 2018 leaves the Cayman government in the diffi- cult position of not knowing what exactly it has committed to. For Tim Ridley, the former chairman of the Cayman Islands Monetary Authority, it is thus only short-term relief that Cayman is not on the blacklist. “Politically, the EU could not allow the Crown Dependencies and Overseas Territories to go un- scathed. The result is the resurrection of the gray- list,” he said. “We now have to wrestle with the devil of the details, i.e., what exactly does Cayman have to do to get off the graylist and is that a price we should pay? This is the continuing challenge The EU Council of finance ministers agreed an EU list of non-cooperative jurisdictions in tax matters in a meeting on Tuesday. Cayman reacts to inclusion on graylist PLEASE TURN TO PAGE 8 » EU by February. The publication of the new EU list followed a year-long screening process of 92 non-EU countries. EU member countries were exempt from the analysis. In November 2016, the EU Council established three cri- teria that meant the examined ju- risdictions had to be considered compliant on tax transparency, fair taxation and the implemen- tation of measures to prevent tax base erosion and profit shifting (BEPS), a term used for the loss of tax revenue as a result of tax eva- sion and aggressive tax avoidance by multinational companies. The 17 blacklisted countries failed to take proper action to ad- dress deficiencies identified, did not engage in a meaningful di- alogue on the basis of the EU’s criteria, and did not indicate they would take action in the fu- ture, the EU Council said in a press statement. The EU said tax legislation, policies and administrative prac- tices in blacklisted countries have caused or may cause a loss of revenues for its member states. The listed countries are therefore strongly encouraged to make the changes requested of them, but the EU Council stopped short of agreeing specific sanctions. The lists will be updated once a year. Lack of economic substance The EU had no concern with Cayman’s tax transparency in re- lation to the exchange of tax in- formation with other countries or the implementation of the OECD’s base erosion and profit shifting (BEPS) program. Cayman does also not offer preferential tax regimes that treat local companies dif- ferently than Cayman-registered overseas companies. But, according to the EU Council outcome documents, the Cayman Islands – together with Bermuda, Guernsey, Isle of Man, Jersey and Vanuatu – has fallen PLEASE TURN TO PAGE 8 » IMMIGRATION HALFWAY THROUGH PR BACKLOG BRENT FULLER bfuller@pinnaclemedialtd.com Cayman Islands immigration authorities have dealt with just more than half of all out- standing applications for permanent residence, according to figures released Tuesday by the Immigration Department. As of Nov. 28, a total of 682 residency applica- tions filed since Oct. 26, 2013 had been decided. A total of 385 were granted, while another 183 were refused – about a 67-percent approval rate. Former gov’t minister charged with assault Mike Adam pleads not guilty, trial set for March CAROL WINKER cwinker@pinnaclemedialtd.com Former government minister Mike Adam appeared in Sum- mary Court Tuesday charged with common assault. Magistrate Valdis Foldats noted that Crown counsel Ken- neth Ferguson had handed pa- pers disclosing the Crown’s case to defense attorney Waide Da Costa. The magistrate asked if he should set another date for mention of the matter. “Let’s not waste time. Not guilty,” Mr. Da Costa replied. The charge was then put to the defendant - that on June 27, 2017, at King Road in West Bay, he assaulted a named male. The defendant replied, “Not guilty.” The Register of Electors shows him to be a resident of King Road. No other details of the case were specified in the charge and none was referred to in court. Since summary trials now require the completion of a case management form, the magis- trate asked what the issue was. Mr. Da Costa said it was provocation and self-defense. The attorney noted that the Crown had listed five witnesses, including the defendant and his wife. “It’s incredible that they would call my client as a wit- ness against himself,” Mr. Da Costa commented. The magistrate scheduled the trial for March 13, 2018. Michael Thomas Adam, as he is listed on the cause list, was elected in 2009 as a MLA for George Town and served as minister for community affairs, gender and housing. In the 2013 election, when George Town still had six representatives, he placed seventh. This year, with the new system of single-member constituencies, he placed second in George Town South. PLEASE TURN TO PAGE 7 »WEDNESDAY DECEMBER 6, 2017 • CAYMAN COMPASS 2 LOCAL NEWS • Daily Matinees Every Day • $8.00 Seniors, Mon-Fri Before 6pm Cayman Cinema@cbcinema6cbcinema6 • Additional charges will apply per 3D/VIP ticket requested SATURDAY NIGHT: For your viewing pleasure, minors under the age of 18 will not be admitted to any film starting after 6pm, unless accompanied by their parent. - WEDNESDAY - 640-FILM (640-3456) COCO 3D (PG) 12:35 2D I 4:00 I 7:00 2D I 9:15 WONDER (PG) 1:05 I 6:30 JUSTICE LEAGUE 3D (PG13) 1:00 I 4:20 2D VIP I 7:10 2D VIP I 9:55 2D DADDY’S HOME 2 (PG13) 2:35 I 5:05 I 7:35 I 10:10 TIL DEATH US DO PART (PG13) 1:50 I 4:25 I 7:15 I 9:55 MURDER ON THE ORIENT EXPRESS (PG13) 3:40 I 10:00 VIP THOR: RAGNAROK 3D (PG13) 1:20 2D VIP I 3:30 I 6:30 2D I 9:30 Motorbikers hold smaller ride on Sunday BRENT FULLER bfuller@pinnaclemedialtd.com There was another mo- torbike ride in Cayman last Sunday, but this one involved a small number of riders in a supervised area with police oversight. Royal Cayman Islands Po- lice Service neighborhood of- ficers and the police Traffic Unit closed off a section of Sparkys Drive in George Town’s Industrial Park area between 1 p.m. and 6 p.m. Sunday, allowing riders to use a section of the paved road and also to go off-road. Police were on scene to en- sure that all non-street legal bikes were hauled to the area on a trailer or pickup truck, rather than being driven to the location. About 10 riders partici- pated. Police said they had expected more, but it was be- lieved more riders were un- able to arrange legal trans- port to the event. Police Commissioner Derek Byrne met with some of the motorbike riders and two local members of the Leg- islative Assembly last week to discuss ways motorbike events could be handled safely in the future. On Nov. 26, a group of about 200 bikers took to the streets for the an- nual “Ride of the Century” event, also known as “Ride Out Cayman,” with some of the vehicles being unlicensed for use on local roads. Many of the riders were seen speeding, performing stunts in opposite lanes of traffic, and even storming a police roadblock that was set up in Bodden Town during the Nov. 26 ride. Mr. Byrne said this past Sunday’s event was more along the lines of what police would like to see. “This event is a small step in the right direction,” Mr. Byrne said. “It is clear to me that there are riders who will take the opportunity to ride safely and legally, while others will not. “We will continue our di- alogue with the biking com- munity, but also enforce the law for those who insist on riding illegally and endan- gering themselves and others on the road. To this end, we need as much information as possible from the public that helps us identify rogue bikers and locate illegal bikes.”Police and motorbikers at the site of Sunday’s event in Industrial Park, George Town. – PHOTO: RCIPS SPENCER FORDIN sfordin@pinnaclemedialtd.com This Christmas, your best present might be attached to the tree instead of sit- ting under it. The holiday season has inspired the staff at Island Veterinary Services to go the extra mile in the interests of Cayman’s most vulnerable pets. More than 60 dogs are pictured on the Christmas tree at the vet’s office, and all of them are available for adoption at the Cayman Is- lands Humane Society. Sixty-six dogs of various ages are featured on the tree, and Island Veterinary Ser- vices hopes to find some of them new homes this holiday season. Jennie Boyers, who works as a nurse for the vet, came up with the idea for the Christmas tree while pon- dering ways she could help Cayman’s adoptable dogs. “It just makes me sad around Christmas to know there’s so many dogs at the shelter that need homes,” she said. “We’re seeing so many people leaving island now and leaving their animals behind. The shelters are full and there are so many animals down there. I just thought, ‘I need to do something to try and get a little advertisement for the dogs down there and see if we can get them homes.’” The cards on the tree are hung like ornaments, and they feature action photos of the adoptable dogs and their names written prominently in block letters. Some are close- up photos of the dog’s faces, but others show them lifting a paw or sitting down in front of an oceanfront background. Dozens of dogs are shel- tered at the Humane Society this holiday season, but some of them are living in foster homes until they can find their permanent adoptive home. The tree at Island Vets is located in the lobby, and many of the people waiting for appointments wind up checking out the photos. Some of the customers, said Ms. Boyers, know the dogs from volunteering at the Humane Society. But others are seeing them for the first time and getting a taste of how many ani- mals need a home. “Everybody loves it,” said Ms. Boyers. “Everybody thinks it’s such a great idea.” Not everybody can open their homes to a new pet, though, and that is why Is- land Veterinary Services is also allowing for its cus- tomers to leave holiday gifts under the tree for the Hu- mane Society. People can leave a monetary dona- tion, but can also purchase necessary dog implements like collars, leashes, toys, shampoos and flea and tick removal products. The main goal, beyond finding dogs a new home, is to connect Cayman’s com- munity of animal lovers and widen the network of people likely to adopt in the future. So many potential dog fami- lies are looking for puppies, said Ms. Boyers, and they are overlooking the perfectly good pets at the shelter. “Adult dogs are always left behind, but they’re such a great pet to adopt,” she said of the pets on the tree. “They’re already trained and they adapt so easily to the home. They have house training.” Barking up the right tree The friendly faces of Roxy, Kenmore and Deco call out to the animal lovers at Island Veterinary Services. Recognizing the volun- teers that make its work pos- sible, the Cayman Islands Red Cross celebrated International Volunteer Day on Tuesday. “Our volunteers are our lifeline,” local director Jondo Obi said. “There would be no Red Cross without volun- teers. Whether they are the 200 persons who make up our membership in Cayman RED CROSS CELEBRATES VOLUNTEERS or the 115 million who are part of the Red Cross movement worldwide, our organization is only here because of their ser- vice and dedication to the community.” The Cayman Is- lands Red Cross has been providing help to those in need since its founding in 1961. For more information or to join the Cayman Islands Red Cross, visit www.redcross.org.ky, call 949-6785 or email vrm@redcross.org.ky. Members of the Cayman Islands Red Cross man one of the water stations for the 2017 Cayman Islands Marathon.CAYMAN COMPASS • WEDNESDAY DECEMBER 6, 2017 The islands’ most-trusted news source 3The islands’ most-trusted news source – EDITORIAL – Opinion&Letters The Cayman Compass welcomes comments, opinions and viewpoints from readers. Letters to the editor can be emailed to editor@pinnaclemedialtd.com, submitted via www.caymancompass.com, sent by post or hand-delivered to the Compass offi ce. Envisioning a bright future for Cayman’s schools “Whether you think you can, or think you can’t – you’re right.” – Henry Ford, inventor New Education Council Chairman Dan Scott – who is managing partner of Ernst & Young and the fi rst private citizen to lead the council – brings a breath of fresh air and a welcome sense of optimism to Cayman Islands government schools. Two months into his tenure, Mr. Scott has homed in on a pair of lynchpins for elevated standards in our public education system: Access and accountability. That means making sure every child in Cayman has access to the best possible educational opportunities, and that everyone in the school system – including administrators, teachers, students and families – are upholding their end of the bargain. Mr. Scott is living proof of the importance of receiving an excellent education – and the possibility of receiving that education right here in Cayman. He is a product of local public schools (and the progeny of his father “Teacher Scott,” after whom Cayman Brac’s Layman E. Scott High School is named). Mr. Scott articulates a concise goal for our coun- try’s public education system: “I want parents to say, ‘I want my kids to go to public school.’” Perhaps the boldest aspect of Mr. Scott’s vision for our public schools is that he believes in our public schools. On a subject that is too often characterized by disappointing news and lower expectations, Mr. Scott provides a much-needed voice for hope. It is no secret that Cayman’s public school system – to employ “report card” terminology – “Needs Improvement.” Underperformance, student misbe- havior and lack of attendance are too prevalent. We cannot allow these chronic problems to become toler- ated as the status quo. On the contrary, as we’ve written before on the topic of education, we subscribe to advice given to us by American performance consultant Tony Robbins: “The quickest way to improve your life is to raise your standards.” High expectations aren’t enough by themselves to guarantee greatness, but without them, failure is all but inevitable. Having set an appropriately high bar, the Education Council’s task is to develop a plan to take our schools from “fair” to “excellent.” Mr. Scott told the Compass he is interested in: • Measuring student achievement not only against past performance but also against top-performing schools around the world • Encouraging teachers to use innovative classroom methods, while holding them accountable for results • Encouraging students’ proper deportment and respect for education by enforcing standards, such as school uniforms, intended to cultivate a fruitful learning environment • Allocating scholarship support not only based on grades, but also on a student’s fi nancial need, to make sure funds are targeting high-achieving students who otherwise may not be able to pursue their educational goals. As always, the easy step is setting the goals. The hard part is achieving them. But with clear-eyed, con- sistent and realistic leadership, we share Mr. Scott’s confi dence in Cayman’s educators and students. Our country’s schools have found a champion in Mr. Scott. The new Education Council chairman is someone who can communicate a bold vision, hold the system to a high standard and help steer our schools to a promising future. The U.S. economy is showing more vigor – ac- cording to the Atlanta Fed model, leading indicators predict a 3.5 percent fourth- quarter growth. That’s re- markable following second- and third-quarter growth at or above 3 percent but for some analysts a fl attening yield curve could harken another recession. Economists prefer to mea- sure the steepness of the yield curve by taking the dif- ference between the rates on the 10-year Treasury and the 30-day T-bill. Every re- cession since the 1950s has been preceded – by about one year – by a negative value for that spread. Long rates may be pushed higher – widening the yield spread and steep- ening the curve – by in- vestor expectations that eco- nomic growth or infl ation will pick up. Conversely, the spread can go negative – or in common parlance, the yield curve inverts – when investors expect a reces- sion and rush to the safety of long bonds. It is important to recognize four issues. First, the yield curve inverted in 1966 and became nearly fl at in 1998 but a recession did not follow. Second, the yield curve is hardly fl at now – the spread is a bit more than 100 basis points. That may be lower than in recent years but is hardly low enough to trigger a signifi cant probability of a recession – for example, as modeled by the Federal Re- serve Bank of New York. Third, there is no signifi - cant argument in economic theory that a fl attening or in- verted yield curve must be a precursor to a recession. It is a statistical correla- tion like the Sun Spot theory of the business cycle – the latter worked pretty well in the past but missed the Great Recession entirely. Correlation is not cau- sality. That’s why we have had two false positives for the yield curve, and the under- lying factors that give rise to coincidence change over time. In particular, during much of the post-World War II period, capital markets were more Balkanized than today. Nowadays, when the Fed pushes up short rates, sig- nifi cant amounts of foreign money can more easily rush in as long rates try to rise. That can distort the meaning of a resulting fl atter yield. Even without Fed action, the current political turmoil in Germany and elsewhere in Europe, for example, could push U.S. long rates down and fl atten the yield curve for reasons having little to do with underlying U.S. economic conditions or Fed policy. Finally, since President Donald Trump was elected, the spread has narrowed from 1.45; however, it is not even close to zero, and offers no cause to panic. Several issues are weighing on long rates during the latter part of this recovery. Globalization has in- creased wage arbitrage and, despite low unemployment, no signs are apparent that wage infl ation will overcome recent improvements in pro- ductivity growth to push non-oil infl ation much above 2 percent. Hence, the Fed should have no need to push up the federal funds rate more quickly than outgoing Chairman Janet Yellen has led markets to expect. The real long-term price of capital is lower these days. Firms need less of it to create value in an economy driven more by digital technologies than heavy industrial as- sets. That simply has lowered the demand for fi nancing, and stocks are hardly over- priced with P/Es in line with 25-year averages. Although years of easy credit have created risks among lower-grade corpo- rate bonds and in securi- tized leverage loans used by lenders to fi nance pri- vate-equity fi rms and hedge funds, those risks would likely only actu- alize into serious trouble if the Fed moved up rates more abruptly – again an unlikely scenario. The big issue remains the tax bill moving through Congress. A failure by the GOP Senate would deliver a body blow to equities mar- kets and that could set off a panic – not merely among eq- uity investors but also CEOs making business expansion and hiring decisions, and consumers who are already saving too little. These days, politics poses more threats to the economy than the machinations of the bond market as measured by the slope of the yield curve or any other metric. Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. © 2017, The Washington Times 4 WEDNESDAY DECEMBER 6, 2017 • CAYMAN COMPASS Treating US Congress as a harbinger of recession PETER MORICI a harbinger of recession PRINTED AND PUBLISHED BY: Caymanian Compass Limited (a subsidiary of Pinnacle Media Ltd) Compass Centre Shedden Road, George Town SEND US YOUR VIEWS OR NEWS: P.O. Box 1365 Grand Cayman KY1-1108, Cayman Islands Telephone: (345) 815-0095 Email: newsdesk@pinnaclemedialtd.com ADVERTISE WITH US: Telephone: (345) 949-5111 Email: sales@pinnaclemedialtd.com Website: www.caymancompass.com PUBLISHERS DAVID R. LEGGE AND VICKI L. LEGGE EDITOR-IN-CHIEF DAVID R. LEGGE EXECUTIVE EDITOR PATRICK BRENDEL A MEMBER OF THE INTER-AMERICAN PRESS ASSOCIATION “Give light and the people will fi nd their own way” These days, politics poses more threats to the economy than the machinations of the bond market as measured by the slope of the yield curve or any other metric.BRENT FULLER bfuller@pinnaclemedialtd.com Outgoing prisons director Neil Lavis will be replaced by another U.K.-based cor- rections manager early in the new year, the Ministry of Home Affairs confirmed in a statement released Tuesday. Mr. Lavis, who unexpect- edly resigned last month, will stay on until Dec. 15, at which time Deputy Prisons Director Daniel Greaves will take over through Dec. 31. The ministry noted it had asked Governor Helen Kil- patrick’s office to request “expressions of interest” for the interim director’s post via the U.K. Association of Prison Governors, with an eye toward filling the role in January. “Through this process, the ministry hopes to se- lect a qualified individual to undertake the role in an in- terim capacity on second- ment,” the ministry statement noted. “This will support business continuity in the prison and enable the min- istry to conduct the recruit- ment exercise for a full-time prison director.” Mr. Lavis told ministry of- ficials and senior prions staff on Nov. 20 that he would resign, about five months after signing a new contract that would have kept him at Cayman’s prisons service through June 2020. According to an an- nouncement Mr. Lavis sent to some prison staffers: “I have decided to leave the Cayman service as director and return home. I will be going before Christmas and the family in the new year.” Mr. Lavis first arrived in Cayman in June 2013, re- placing former prisons boss Dwight Scott who retired in late 2012 after a number of scandals beset the prison system. During the past two years, Mr. Lavis’s tenure was beset by a scandal involving a prisons deputy director at- tempting to use hidden camera surveillance on an- other prisons officer, which became public knowledge and ended in a falling out among senior prisons staff. The prisons officer being sur- veilled was alleged to have been involved in “inappro- priate behavior” with pris- oners, though she later de- nied that in an interview with the Compass. There have also been questions raised concerning the backgrounds of some re- cent hires at the prisons service, the Compass has learned, which resulted in at least one of the new officers’ employment being ended. A second officer was sus- pended with pay and no final resolution has been reached in the matter. In addition to staff prob- lems, the overcrowded men’s prison, Northward, has seen tensions among pris- oners rise within its walls since last year. However, the ministry also noted there had been a number of big successes in Mr. Lavis’s recent tenure, in- cluding the hiring of 19 mew prisons officers and a start to the design process for a new prisons building. Mr. Lavis implemented the release on temporary li- cense program, which pre- pares lower-level or less vi- olent offenders for re-entry into the workforce when their sentence ends. A total of 24 inmates have taken part in the program to date. The prisons service has also sup- ported several other rehabil- itation programs geared to- ward preventing recidivism. Prisons also took over the daily management of the Im- migration Detention Centre during Mr. Lavis’s tenure, su- pervising the care and repa- triation of Cuban migrants who come to Cayman in makeshift watercraft. “My goal as prison di- rector has always been to provide a safe and secure en- vironment for the people of this country, and to ensure the inmates in my care have access to any type of rehabil- itation programme and treat- ment they need to facilitate their return to society and re- duce the likelihood that they will reoffend,” Mr. Lavis said in a statement. CAYMAN COMPASS • WEDNESDAY DECEMBER 6, 2017 5 LOCAL NEWS CHRISTMAS SWEEPSTAKES BAYSHORE MALL, CARDINALL AVENUE & THE STRAND +1 (345) 815 7492 • KIRKFREEPORT.COM 3 X US$5,000 CASH WINNERS 5 X US$1,000 CASH WINNERS AND OTHER GREAT PRIZES! Every US$100 purchase at any Kirk Freeport store made before noon on December 23rd qualifi es for all prize draws! Winners will be announced on Z99 and Rooster 101.9 at 6pm each drawing date. RULES AND REGULATIONS: Minimum US$100 purchase to enter. One entry per purchase. Receipts can be combined to reach US$100 requirement. Winner must claim prize at Kirk Freeport on Cardinall Avenue within 7 days of announcement. Non-winning valid entries from Kirk Freeport Christmas Sweepstakes will be included in the Rolex Drawing. Kirk Freeport employees and immediate family members are not eligible to enter. DEC 1ST: ENTRY COLLECTION BEGINS Dec 8th US$5,000 Dec 15th US$5,000 Dec 18th - 22nd US$1,000 each day Dec 23rd US$5,000 US$40,000 IN CASH AND PRIZES WILL BE WON! THIS CHRISTMAS MAKE YOUR OWN LUCK Rolex giveaway is on January 2nd. UK will bring in ‘interim’ prisons boss Neil LavisDaniel Greaves In the pink for Christmas The Arts and Recreation Center in Camana Bay was packed Saturday as the local community came out to sup- port the Pink Ladies’ annual Christmas Bazaar. The event is considered one of the ultimate signs that Christmas is on its way in Cayman. Saturday’s ba- zaar marked the 35th time the Pink Ladies has hosted the event, which is the orga- nization’s major fundraiser for the year. As well as selling a huge variety of jams, chut- neys, cookies and other goodies, the Pink Ladies al- ways ensure that there is also plenty of tea on offer to wash down the sandwiches, scones and cakes on offer for immediate consumption. Since its inception, the price of admission has stayed the same – $5 – to ensure the event is affordable to all. This year, entertainment was provided by the National Choir, Cayman Youth Choir, Miss Jackie’s Dance School and two high school bands, and the students of the Purple Dragon Martial Arts School also put on a demo. Pink Ladies were on hand at the annual Christmas Bazaar, including Sandra Joseph, Kathleen Murphy, Elizabeth Hamilton, Maxine Drake and Cynthia Joyce.6 LOCAL NEWS WEDNESDAY DECEMBER 6, 2017 • CAYMAN COMPASS Mega-ship will tender in Cayman JAMES WHITTAKER jwhittaker@pinnaclemedialtd.com MSC Cruises has an- nounced it will bring its new 5,714 passenger mega-ship – the fourth-largest cruise ship in the world – to the Cayman Islands from 2019. The ship will need to be tendered, which appears to undermine claims from the pro-port lobby that new cruise piers are needed in George Town to attract the new generation of larger ships to the island. Both Royal Caribbean and Carnival Cruise Lines have previously stated that they will only bring their mega- ships to ports with a proper dock and Tourism Minister Moses Kirkconnell has cited the need to appeal to larger ships as one of the moti- vations behind the cruise berthing project. But MSC does not ap- pear to be deterred. The com- pany announced Monday that it will be launching the new MSC Meraviglia, which it describes as a “sophisti- cated mega smart ship” in October 2019, and including the Cayman Islands on its Western Caribbean itinerary. The European com- pany, which is in the midst of a US$10 billion invest- ment plan, will have 11 mega cruise ships coming into ser- vice between 2017 and 2026. The Compass reached out to MSC cruise lines and to Tourism Minister Kirk- connell for comment but had not received a response by press time. The Cayman Islands has been inundated with cruise traffic over the past few months, with up to 20,000 passengers arriving in port on the busiest days, as ships divert from hurri- cane-affected islands in the Eastern Caribbean. David Carmichael, man- ager of Caribbean Marine Services, one of Cayman’s big- gest tender companies, said it was handling the additional passengers comfortably and could cope with a ship the size of the MSC Meraviglia. “Capacity is no problem,” he said. “The Carnival Vista and the Norwegian Epic are up around 5,000 pas- sengers and for that we use five, 250-passenger tenders through two or three shell doors, just like a dock. “If we have to reach up to 6,000 passengers, this would require extra tenders, which we have, and more shell door access.” He said Cayman’s tender operations were unique be- cause they were designed to enable ships to open their shell doors and roll guests on and off as they would on a dock. “We have all but done away with the steps and ‘old school’ tendering practices. Cayman’s shore-side tenders now operate almost exclu- sively this way, with the port enhancing with new shore side ramps and CMS doing the same with our tenders.” If a ship could dock in Cayman, he said, it could be tendered. He added that the in- crease in passengers in the town was going smoothly. Caribbean Marine Services tenders up to a maximum of 17,000 passengers a day, though not all ships require shore-side tenders. “How are we handling the increase? Just fine. It is just like any other day,” he said. “We are not sacrificing ser- vice to get more ships in. We handle what we can.” He said the busy days were historically Tuesday, Wednesday and Thursday, so the increase had pro- vided work on the off days, including weekends. He added, “Princess, Costa, NCL, Celebrity, Hol- land America, MSC, AIDA and a few others all carry ten- ders, so when you see a six- or seven-ship day, those extra ships tender themselves. Cur- rently we handle at least four ships on a busy day and the rest self-tender.” The 5,714-passenger MSC Meraviglia, which launches in October 2019, will include the Cayman Islands on its Western Caribbean itinerary. POSTAL WORKER’S SENTENCING ADJOURNED Magistrate queries victim impact statement CAROL WINKER cwinker@pinnaclemedialtd.com Sentencing was postponed Monday for former post of- fice employee Herbert Conolly after Magistrate Valdis Fol- dats questioned the contents of a victim impact statement. The magistrate said it appeared that several cus- tomers had entrusted pay- ments for their utilities to the post office, but had been served with disconnection notices. He asked that the matter be looked into. Conolly, 34, had worked as a senior customer service of- ficer, managing the counter and supervising three junior officers. In August, he pleaded guilty to false accounting and breach of trust. The false ac- counting was the produc- tion of a check dated Oct. 15, 2016, on an account Conolly knew had been closed since 2014. The breach of trust was in connection with the du- ties of his office, by removing public funds. At the beginning of the sentencing hearing, Crown counsel Greg Walcolm ex- plained that Conolly was is- sued an “indent” (a cash float) for his job and he was re- quired to provide a balance on a daily basis. Later he was permitted to balance the in- dent on a weekly basis. He knew that any viola- tion would result in termi- nation of his job, Mr. Wal- colm pointed out. He also knew that the indent was not to be used for any personal purpose. On Oct. 31, 2016, the deputy post master general discovered that Conolly’s in- dent had not been balanced since Sept. 27, 2016. She also discovered that five other em- ployees had failed to balance their indents. Checks were made and on Nov. 3, Conolly was found to be short $1,619.27. A check for $3,400 was included in the items balanced. The check was drawn from the account of Kitchens and Bath Solu- tions, in which Conolly was a principal. The account had been closed since 2014. Conolly was asked why a check of such antiquity was included and he said a senior member of staff had given him permission to breach the policy of the postal ser- vice. He was required to pro- duce a receipt evidencing the deposit of the check, but failed to do so. Asked why he had not bal- anced his indent for a certain date, he initially indicated he had done so, but failed to produce it. He then produced to his supervisor a balance sheet that was fraudulent. On Nov. 7, 2016, he re- quested a meeting and asked that it be recorded. He said he had breached the public trust by taking $4,300 and replacing those funds with a check drafted for that amount while knowing that the account was closed. He said he had done so hoping to replace the funds. He explained that he had failed to pay a sub-contractor who had worked for his com- pany and so he entrusted the sub-contractor with his motor vehicle. He was made aware that the person was at a well-known pawn agency trying to pawn the vehicle. The check was deposited and refused. Disciplinary proceedings commenced, Mr. Walcolm said. Conolly was dismissed on Nov. 17, 2016 and up to Dec. 1, 2016 had not been able to make any restitution. It was then that the mag- istrate asked what other par- ties had been affected by Conolly’s actions, referring to the disconnection notices. He noted that those matters had been reported to police at the same time that the check had been reported. Mr. Walcolm said he would need to find out what had happened at the begin- ning of the investigation. Defense attorney Jona- thon Hughes pointed out that the matter was sent to po- lice over a year ago. The de- fendant wanted to get on with his life and his new job. Mr. Hughes suggested that the court proceed to sen- tence that day. The magistrate adjourned the case until Monday, Dec. 11, to give Mr. Walcolm time to look into the matter. Water park planned for George Town JAMES WHITTAKER jwhittaker@pinnaclemedialtd.com A Cayman businessman is seeking permission to station a 15,000-square- foot inflatable water park offshore on the George Town waterfront. Talbert Tatum has set up the company Oasis Aqua Park and is seeking a coastal works license to station the slides and ob- stacle course just off the Eden Rock dive shop. He told the Cayman Compass he had already purchased the equipment and hopes to be up and running by March next year. Mr. Tatum said ac- cess to the park would be through Eden Rock. He said, “The equipment has been here for a while and we are just waiting for the go-ahead from Cabinet. “I have been planning this for two years. The ap- plication went in, in Feb- ruary. Nothing like this has been done before in Cayman, so it is taking a little longer.” He said it would be the biggest water park in the Caribbean, visible from the waterfront and to arriving cruise ships. Mr. Tatum said the site would stretch from the northern end of Eden Rock to close to the Para- dise Grill. He said the dive sites off Eden Rock would be unaffected and the area was clear of the regular shipping movements. “We are not in an area where boat traffic is al- lowed. It is mostly snor- kelers in that area,” he said. A safety boat will patrol the area in case of emer- gencies, he said. The equip- ment can be removed in event of a severe storm but is intended to be moored at the site permanently. He said the aim was to appeal to cruise ship vis- itors arriving in George Town, as well as locals: “There is going to be slides, trampolines, an ob- stacle course. It is a fun way to get people active and enjoying the ocean.” Inflatable slides like this one will form part of the 15,000-square-foot water park planned for the George Town waterfront.CAYMAN COMPASS • WEDNESDAY DECEMBER 6, 2017 The islands’ most-trusted news source 7 VIP package for two includes: • Round-tripairtravelandaccommodation • ProfessionalmakeoverbeforetheGRAMMYAwards® •Ticketstoattendthe60thGRAMMYAwards® • PrivatetourofNewYorkCity • Andmore! 186904-Ad-CompassJRpg-4colx12-MC-60th-Grammys.indd 111/7/17 5:57 PM Another 38 applications were withdrawn by the appli- cants and immigration offi- cials discarded 22 other bids that were filed too late. There was a remaining backlog of 618 residency ap- plications, as of last week, from non-Caymanians who have been in the territory for more than eight years consec- utively and who are seeking to remain here for the rest of their lives. These applications do not include non-Cayma- nians who are seeking perma- nent residence through mar- riage to a Caymanian or via other means. Immigration staffers and members of the Caymanian Status and Permanent Res- idency Board have heard most of the decided appli- cations within the past four months, between July 31 and Nov. 28. Board hearings got off to a slow start in late June and July. There will be some delays in consideration of these ap- plications during the holiday period. The Caymanian Status and Permanent Residency Board will stop meeting after Dec. 14 and will resume on Jan. 11. Administrative staffers at the Immigration Department will continue re- viewing those applications during working days over the holiday period, although they will also take normal hol- iday time off. Immigration staffers, acting under authority from the chief immigration officer, can decide on residency ap- plications by themselves. However, it is likely they would only do so in cases where the person’s case was “non-controversial” – obvi- ously having enough points under the scoring system to be approved. It is also entirely possible that pending applications will be taken out of order over the next few months, according to HSM Chambers law firm partner Nicolas Joseph. “In order to process appli- cations as quickly as possible, the authorities appear to be dealing with those which are up to date and in a best po- sition to be determined, even though they may have been filed relatively recently,” Mr. Joseph said in a recent email to firm clients. “Whilst this is positive and is reducing the delays for some whilst maximising the effectiveness of the au- thorities’ efforts, it does mean that there are cases of rela- tively recent applications (in- cluding some filed as recently as early this year) being de- cided, whilst others dating back to 2015 (or even be- fore) may not have yet been finally determined.” Residency applicants whose cases are “on the fence” of receiving the neces- sary 110 points for approval will be contacted by immigra- tion authorities, asking them to provide any final updates to those applications prior to being heard, Mr. Joseph said. If applicants do not re- ceive permanent residence, they can file an appeal against the decision, but must do so within 28 days of that decision being reached. If unsuccessful appli- cants do not appeal, they are typically given 90 days to settle their affairs on island before departing CONTINUED FROM PAGE 1 Immigration halfway through PR backlog Miss Cayman shares lessons from Las Vegas JEWEL LEVY jlevy@pinnaclemedialtd.com Cayman beauty queen Anika Conolly may not have placed in the Miss Universe competition in Las Vegas last month, but she said she enjoyed every moment of the pageant. “It truly was a won- derful experience,” she said after her return to Grand Cayman last week. Ms. Conolly was welcomed home with open arms by the Miss Cayman Committee. “Even though I didn’t know what the judges’ results were, there were international pageant experts who thought I did excellent. In that mo- ment, I knew that even if I didn’t win, I had done my best,” Ms. Conolly said. Her biggest surprise at the pageant was the level of en- thusiasm pageant fans had for their queens. “They came out to every event they could, and they cheered loudly for their fa- vorite girls. Honestly, we would not be where we are without our sup- porters,” she said. She told herself before she left, and during the pageant, that this was a once-in-a- lifetime opportunity that not many people get. At the com- petition, she decided to fully enjoy the moment and do the best that she could. “I think with that men- tality, I gained much more than I thought I would.” She said there were many special moments she will cherish from her trip to Las Vegas but the most spe- cial was seeing Cayman Is- lands flags in the audi- ence raised by her family and the Miss Cayman Committee representatives. “It warmed my heart when I was on stage because I could feel their love and sup- port from across the theater – Cayman might be small, but we are mighty,” Ms. Conolly said. Despite most of the pag- eant being spent participating in rehearsals, Ms. Conolly did schedule in some fun activi- ties like the High Roller Ferris wheel on the Las Vegas Strip. “We had a bird’s eye view of Vegas and I also got to watch Celine Dion perform. She is a legend and it was a phenomenal experience to watch her sing and engage with the audience.”Miss Cayman Committee members welcome Anika Conolly home from the Miss Universe contest.WEDNESDAY DECEMBER 6, 2017 • CAYMAN COMPASS The islands’ most-trusted news source 8 foul of a fair taxation crite- rion, which is aimed at tax regimes that facilitate off- shore structures which at- tract profits without real economic activity. The Cayman government has “committed to addressing the concerns relating to eco- nomic substance by 2018,” the document noted. In a statement, Cay- man’s Ministry of Finan- cial Services said, as part of this particular crite- rion, the EU wants to en- sure that jurisdictions do not facilitate letterbox com- panies. These companies, which are set up to circum- vent tax obligations, do not have physical presence, and therefore do not perform tangible economic activities, in the country where they are established. “The majority of Cay- man’s companies are not bricks and mortar, but they also are not letterbox com- panies,” Premier Alden McLaughlin said. “Rather, they are financial instru- ments that pool invest- ment capital and facilitate international transactions. “In addition, our trans- parency aids foreign tax authorities with their tax assessments. We provide taxpayer information to more than 100 countries, including all EU Member States and G20 countries. Thus, there is no interest in setting up these com- panies to circumvent tax obligations.” In cooperation with the EU, the government said it is further assessing the fair taxation criterion, and will work with EU Council offi- cials to address this issue by December 2018. “This is in line with the Cayman Islands’ long- standing commitment to international cooperation, which has been recog- nized by international or- ganisations such as the OECD, the Financial Sta- bility Board, and the Inter- national Organisation of Se- curities Commissions,” said Tara Rivers, the minister of financial services. Cayman Finance, the as- sociation that represents Cayman’s financial ser- vices industry, said the or- ganization had worked hard with the government to address the concerns raised by the European Union and emphasized Cayman’s compliance record. “The Cayman Islands meets or exceeds the highest global financial standards, sharing the same OECD rating as many EU Member States,” the organization said in a statement. “We are confident that we will be able to address the areas where the EU requires some further clarification.” for our government in this unending saga.” The EU Council has made clear that the list is not a one-off. Toomas Tõniste, min- ister for finance of Estonia, which currently holds the EU Council presidency, said the EU will regularly review and update the list in the years to come. “Our aim is to ensure that good tax governance be- comes the new norm,” he said. EU Commissioner Pierre Moscovici said the EU black- list represents substantial progress. However, he left little doubt that it is only the beginning of a process that will put more pressure on off- shore financial centers. “Its very existence is an important step forward. But because it is the first EU list, it remains an insufficient re- sponse to the scale of tax eva- sion worldwide,” he said. “I therefore call on the fi- nance ministers to avoid any naivety on commitments. The countries that have taken commitments must change their tax laws as soon as pos- sible. I also call on ministers to agree quickly on dissua- sive national sanctions. We must do everything we can to keep up the pressure on all of these countries. We must not accept unfair tax competition and opacity.” Countries that are not on the blacklist, he said, “will only be fully off the hook once they have fulfilled their commitments.” The former French min- ister for the economy de- manded a clear timeline for follow-up. “Tax havens must not slip off Europe’s radar screen,” he said. “As a Euro- pean citizen, I share the ex- pectations of those who hoped for more. I say to them, let us take this list for what it is: a first step. And let us keep up the pressure together, on the member states and on third countries.” Anthony Travers, senior partner at Travers Thorp Al- berga, said in an email, “Mr. Moscovici … and his lists of whatever color lack any in- tegrity insofar as they seek to rely on the highly artificial suggestion that tax competi- tion is ‘harmful.’” He said the EU ignores that regardless where in- ternational investors want to invest, they want to uti- lize the Cayman Islands in a tax-neutral manner to facili- tate that investment. “In no sense can Cayman Islands structuring be re- garded as harmful; taxes are paid in the jurisdictions where the profits are made. What is irritating Mr. Moscovici is that those jurisdictions in- clude the City of London and the United States, which is leading the way in tax compe- tition, and not the EU.” Mr. Travers further criti- cized that the new EU lists make no reference to the EU jurisdictions “where tax avoidance is actually under- taken by abusing OECD-de- signed double tax treaties in Ireland, Luxembourg and the Netherlands.” He said, “The lists have no intellectual or tech- nical validity and withstand no scrutiny.” To the extent that EU member jurisdictions follow the EU guidance and intro- duce measures that would distort capital flows to the Cayman Islands, he recom- mended that the response of the Cayman Islands govern- ment should be to review tax transparency arrangements with the EU jurisdictions in question. “Mr. Moscovici and the OECD cannot eat their cake and have it,” he said. Dan Mitchell, member of the Cayman Financial Re- view editorial board, also took aim at the selection pro- cess employed by the EU. “Using dodgy, non-trans- parent methodology, the Euro- pean Commission launched a new attack on tax competition in hopes of propping up the grim finances of its member states,” he said. “The deci- sion to graylist the Cayman Islands is another sign that the goal posts are about to be moved once again.” Former CIMA board member Richard Rahn added the EU blacklist of so called “tax havens” is nothing more than another attempt “by the cartel of high-tax, low-growth European countries to blame their own failed economic pol- icies” on smaller and largely defenseless jurisdictions. “Putting Cayman and others on a ‘gray’ list merely shows the hypocrisy of the European bullies who ig- nore the fact that Cayman engages in considerable in- formation sharing while real tax havens like the U.S. share little,” he said. CONTINUED FROM PAGE 1 Cayman reacts to inclusion on graylist CONTINUED FROM PAGE 1 Cayman sidesteps European financial services blacklist Migrants wreck boat, land on Brac A small group of Cuban migrants came ashore Monday in Cayman Brac after their vessel crashed and was destroyed, Im- migration Department officials reported. The three men suffered minor injuries in the ma- rine wreck and were being kept in custody on the Brac, awaiting transfer to Grand Cayman. The landing in the Brac was the first Cuban migrant landing reported by the Immigration Department since January. There are now 26 mi- grants housed in the Im- migration Detention Centre in George Town, but the number of illegal arrivals from Cuba has slowed significantly in the past six months. Earlier this year, there were 60 migrants housed at the deten- tion center. The costs of keeping up with the mi- grants has been a signif- icant drain on Cayman’s budget since 2014. The Legislative Assembly was asked in February to approve an additional $2.9 million for the housing, care, feeding and repatria- tion of migrants who had arrived illegally in the terri- tory during 2015-2106. During 2016, it was es- timated that 150-175 Cu- bans came to these shores illegally and were held at the Immigration Deten- tion Centre in Fairbanks, George Town before being sent back home. Many of the migrants told immigra- tion officers that they were on their third or fourth trip to Cayman – trying to make for mainland Cen- tral America in search of jobs or their families in the United States. Rotary gets into festive spirit with tree lighting JEWEL LEVY jlevy@pinnaclemedialtd.com One of Cayman’s big- gest holiday traditions, the lighting of the Rotary Club of Grand Cayman’s Christmas tree, took place in George Town Heroes Square Monday evening. Hundreds gathered to watch the 52nd annual tree lighting ceremony, sing carols, pray, hear the Christmas message and anxiously await the ar- rival of Santa, signaling the Christmas season is offi- cially here again. Pastor Brett Wendle blessed the gathering, Dani- ella Shibli sang the National Song and Raiann Evans, St. Ignatius Swing Band, Montessori By the Sea and Cayman Youth Choir enter- tained guest with songs. “It’s all about fun and celebrations as we bring in the start of this very special season,” said past Rotary president Jeremy Hurst, offi- ciating the ceremony. “[It is] a time for family and friends celebrating the birth of the Lord and re- flecting on how lucky we are to live in one of the most beautiful places in the world – our Cayman Islands.” Young singers from Montessori by the Sea entertained the crowd at the annual Rotary Christmas tree lighting. – PHOTO: JEWEL LEVY The three men suffered minor injuries in the marine wreck and were being kept in custody on the Brac, awaiting transfer to Grand Cayman. 9 WORLD&REGIONAL CAYMAN COMPASS • WEDNESDAY, DECEMBER 6, 2017 *Limited time only. Conditions apply. ® Registered trademark of The Bank of Nova Scotia, used under licence. Apply at your nearest branch today! Make your dreams a reality this holiday season VARIABLE RATE* 4.25% FIXED RATE* 4.5% FINANCING* UP 90 TO % Russian athletes allowed to compete as neutrals at upcoming Olympics LAUSANNE, Switzerland (AP) – Russian athletes will be allowed to compete at the upcoming Pyeongchang Olympics as neutrals despite orchestrated doping at the 2014 Sochi Games, the Inter- national Olympic Committee said Tuesday. The IOC suspended the Russian Olympic committee and IOC member Alexander Zhukov, and also banned Russian Deputy Prime Min- ister Vitaly Mutko from the Olympics for life. Mutko was the sports minister in 2014 and is the head of the orga- nizing committee of soccer’s next World Cup. The IOC also imposed a fine of $15 million on the Russian Olympic committee to pay for investigations into the case and toward future anti-doping work. Still, the IOC ruled that some Russians will be in- vited to compete as an “Olympic Athlete from Russia (OAR)” without their national flag or anthem. Russia could refuse the offer and boycott the games. Russian President Vladimir Putin has previously said it would be humiliating for Russia to compete without national symbols. “An Olympic boycott has never achieved anything,” IOC President Thomas Bach said at a news conference. “Sec- ondly, I don’t see any reason for a boycott by the Rus- sian athletes because we allow the clean athletes there to participate.” The sanctions could be challenged at the Court of Arbitration for Sport. The Russian doping pro- gram caused “unprece- dented damage to Olympism and sports,” said IOC-ap- pointed investigator Samuel Schmid, the former presi- dent of Switzerland who was asked to verify an “institutional conspiracy.” Russia has repeat- edly refused to accept that a state-sponsored doping program existed. Such de- nials helped ensure bans on its track federation and anti-doping agency have not been lifted. Instead, Russia blames Grigory Rodchenkov, the former director of Moscow and Sochi testing labo- ratories, as a rogue em- ployee. It wants the sci- entist extradited from the United States, where he is a protected witness. The executive board reached its decision Tuesday after a scheduled 4½-hour debate when it heard from a Russian delegation that in- cluded world figure skating champion Evgenia Medve- deva. The delegation was led by Zhukov, who was later suspended. Two IOC commission leaders – appointed after World Anti-Doping Agency in- vestigator Richard McLaren upheld Rodchenkov’s doping claims in July 2016 – also re- ported to the Olympic board. Schmid’s report in- cluded a 50-page sworn af- fidavit from Rodchenkov, who was also a key witness for McLaren and an IOC disciplinary commission. The chairman of that dis- ciplinary panel, Swiss lawyer Denis Oswald, reported about prosecuting Russian ath- letes implicated in cheating at the 2014 Sochi Games. By Monday, 25 Russians had been disqualified from the Sochi Games and banned from the Olympics for life, and 11 medals were stripped. One Russian was cleared. CALIFORNIA FIRES RAGE, PROMPTING EVACUATIONS VENTURA, Calif. (AP) – Raked by ferocious Santa Ana winds, explosive wildfires northwest of Los Angeles and in the city’s foothills burned a psychiatric hos- pital and scores of other structures Tuesday and forced the evacuation of tens of thousands of people. One of the blazes broke out Monday in Ventura County and grew wildly to more than 70 square miles in a matter of hours, county Fire Chief Mark Lorenzen said. It was fanned by winds clocked at well over 60 mph (96 kph) that grounded firefighting he- licopters and planes. A smaller fire erupted on the northern edge of Los An- geles, threatening the Sylmar and Lakeview Terrace neigh- borhoods, where residents scrambled to get out as heavy smoke billowed over the city, creating a health hazard for millions of people. A third wildfire broke out Tuesday morning on the northern edge of Los Angeles, sweeping across 200 acres and closing the northbound lanes of Interstate 5. Just weeks ago, wildfires that broke out in Northern California and its famous wine country killed 44 people and destroyed 8,900 homes and other buildings. At least 150 structures burned in the Ventura County fire, officials said. TV re- ports showed mansions and modest homes in flames, along with Vista del Mar Hospital, which treats pa- tients with mental problems or substance abuse, including veterans with post-traumatic stress syndrome. More than 27,000 people were evacuated and one fire- fighter suffered bumps and bruises in a vehicle acci- dent in Ventura County. Au- thorities initially reported one death, but then retracted that saying a dead dog but no person was found in an overturned car. The fire erupted near Santa Paula, a city of some 30,000 people about 60 miles (97 ki- lometers) northwest of Los Angeles. Many of the evacu- ated homes were in that city. “We had the fire come through here, pretty dramati- cally, all night long,” said Karen Heath-Karayan, who stayed up with her husband to douse flaming embers that rained on their home and small lot where they sell Christmas trees. “It was really scary.” They were ordered to evacuate as flames got within about 100 yards (91 meters), but they decided to stand their ground to protect their property, where they have chickens and goats. They hosed down their roof and hit hot spots before winds pushed the fire over a hill toward neighboring Ven- tura, a city of 106,000 where more people were ordered to clear out. “It was just exponential, huge growth because the winds, 50 mile an hour out of the east, were just pushing it and growing it very, very large, very quickly,” Lorenzen said shortly after sunrise. He said daylight would allow air tankers and heli- copters to go into action. Thomas Aquinas College, with about 350 students, was evacuated. A Russian skating fan holds Russia’s national flag over the Olympic rings before the start of the men’s 10,000-meter speedskating race during the 2014 Winter Olympics in Sochi, Russia. – PHOTO: APNext >