With constant threats of blacklists, gray lists and other financial sanctions, the Cayman Islands and other British Overseas Territories have a long-standing contentious relationship with international bodies such as the European Union and the Organisation for Economic Co-operation and Development.
But lately, tensions have also been mounting between those jurisdictions and the United Kingdom – a relationship that has been friendlier in recent decades. This affiliation has been strained due to recent U.K. legislation that is expected to hamstring many of the British Overseas Territories’ financial jurisdictions, as well as the perception that the U.K. has failed to provide adequate help in the wake of recent natural disasters.
These developments were discussed by government officials across the Commonwealth last month at the Commonwealth Parliamentary Association conference, which was held in Cayman. There, government leaders proposed tighter bonds between Caribbean and Commonwealth jurisdictions in order to tackle common problems.
Such alliances have worked in the past, most recently to help resolve the “Windrush scandal,” Premier Alden McLaughlin said at the start of the conference. The Windrush scandal happened earlier this year, when members of the Windrush generation – people who arrived in the U.K. from 1948 onwards, many of them from the Caribbean – were illegally deported or prevented from entering the U.K.
After that scandal came to the forefront in April, McLaughlin said he and other members of the U.K. Overseas Territories Association visited the U.K. and expressed their concern about the issue. The premier said there is “no doubt in my mind” that the association played a key role in resolving that debacle – the aftermath included U.K. Home Secretary Amber Rudd’s resignation, and a compensation scheme being set up for victims.
Looking forward, McLaughlin said he hopes the Commonwealth Parliamentary Association can spearhead the fight against recent U.K. legislation that requires British Overseas Territories to establish public beneficial ownership registries by 2020.
“I believe the CPA continues to be a powerful force for good,” he said.
While the premier seemed hopeful that good-faith negotiations can resolve many of the differences between the U.K. and its overseas territories, many other government officials expressed misgivings that the U.K. is trying to revert to colonial rule.
“When someone has their boot on your neck, you don’t shine their shoes,” said Bermuda MP Chris Famous.
“There’s a new type of 21st century colonialism that is emerging,” added MLA Chris Saunders.
House Speaker McKeeva Bush expressed cynicism that the financial regulatory pressure from the U.K. and the EU are just ploys to divert business from offshore jurisdictions to there.
“It seems that as far as some of the powers that be in the U.K. and EU are concerned, we should restrict our economies to sugar cane, tourism, and fishing, and leave the high-dollar value financial services to them,” he said.
But for all the allegations of mistreatment by the U.K., no representatives from the British Overseas Territories suggested an outright separation from the U.K In fact, Bush made it clear that he’s not in favor of independence at all.
“It may be that we need to be thinking about a greater degree of self-dependence. Not outright independence because we need to crawl before we walk, but we need more protection in our constitutions for ourselves,” he said.
To that end, McLaughlin met with U.K. government representatives and legal advisers in London last month, to push for changes that would remove the U.K.’s reserved powers to legislate for Cayman.
This would make Cayman’s constitutional relationship with the U.K. more similar to the one Bermuda has, and would put it in a stronger position when it comes to challenging the U.K. over beneficial ownership.
However, Famous said that leverage is unlikely to be granted to the Cayman Islands before 2020 – the deadline set by the U.K. for its territories to introduce public beneficial ownership registers or have it imposed on them through an order in council.
“Let’s be realistic,” he told the Cayman Compass. “If Britain is telling the overseas territories, ‘We want you to open up your books,’ they are not going to give you a constitution that allows you to say no. They may give it to you afterwards, but not by 2020.”
Famous added that he believes Bermuda and other overseas territories will ultimately have to push for independence if they want to control their own destinies.
“I personally feel Bermuda is heading towards total sovereignty because the U.K. will, in one way or another, continue to impose its will on us,” he said.
In the British Virgin Islands, a push for independence has already been vocalized by one of its highest leaders in government, Deputy Premier Kendrick Pickering.
“We recognize that while we stand here today, we have declared open war against the U.K.,” he said at a May protest against the U.K.’s beneficial ownership rule, adding that the territory is in the midst of a “divorce from the U.K.”
The BVI may have the most reasons to be aggrieved with its mother country. In addition to the beneficial ownership rule – which will likely be most damaging in the BVI because its financial sector is primarily based on company formations – the territory has also complained about a lack of support from the U.K. after Hurricane Irma.
The BVI has not gotten any direct financial aid from the U.K., but has received an offer from the country for US$400 million ($328 million) in loan guarantees.
However, those guarantees come with conditions. In exchange, the U.K. government will establish an agency to monitor the BVI’s spending of that money, and will also conduct an audit of the territory’s public finances – and require reforms based on the results of that audit.
“Now they are trying to shut down the industry that would have helped us be able to pay it back,” said BVI government backbencher Alvera Maduro-Caines, who was at the conference in Cayman.
Still, the BVI’s premier, Orlando Smith, has balked at his deputy’s comments about independence, insisting that his territory will continue to negotiate with the U.K.
“As I said, what we are doing is actually looking at discussing as soon as possible any further constitutional change that we would be able to negotiate with the U.K,” Smith said at a press conference last month when asked about Pickering’s independence comments.
With independence seemingly off the table and no sign of constitutional reforms coming any time soon, there were few concrete ideas presented at last month’s Commonwealth Parliamentary Association meeting. Along with suggesting tighter alliances among Commonwealth jurisdictions, Speaker Bush also called for closer relationships with the United States, which he said currently have more pro-economic growth policies.
“In the election of President Trump and his rejection of the policies routinely adopted by organizations like the G-7 and G-20, and his adherence to issues like tax competition, I see a philosophy which counters the growing threat of globalization, and which is more closely aligned to the interests of many of us – though I am not here defending the president of the United States,” he said.
Bush also called for the Commonwealth parliamentarians to draft a formal communique from last month’s meeting that outlines common goals among the association’s members. That would be a good start, said Bush, but a more definitive plan will be needed by next year’s meeting.
“If I’m fortunate enough to come next year, I’d like to see results instead of just another family reunion,” Famous said.