The Journal has an exclusive interview with the leader of the new government to appreciate how it intends to ensure the continued success of this most vital of industries. Business Editor Lindsey Turnbull reports.
As one of the pillars of the Cayman Islands’ economy, the financial services sector has been at the heart of Cayman’s success and its high standard of living in its modern history. Yet domestic and international challenges have placed Cayman’s financial services firmly in the spotlight in recent months.
According to Cayman’s new Leader of Government Business and Minister responsible for Finance, Tourism and Development W. McKeeva Bush, his ruling United Democratic Party appreciates these issues need to be addressed “urgently and effectively.”
He states: “Over the immediate to 90 days the UDP will take action to protect this vital industry and improve the benefits to Caymanians.”
He continues: “First and foremost we have to accept that the former Administration (under the People’s Progressive Movement) has failed to follow through in a consistent and cohesive manner on the undertakings we gave to the OECD back in 2000.”
Among those commitments was an agreement to enter into tax information exchange agreements relating to criminal, civil and administrative tax matters with other countries. However, up until a few months ago the Cayman Islands had only entered into one TIEA with the US. Bush says that Cayman was fully aware that the OECD was looking for a minimum of 12 TIEAs in order to regard any country as being compliant with international standards on cooperation in tax matters. The recent TIEA signings with Nordic countries has not been met with any enthusiasm, as they are not regarded as critical players in the international financial system.
Bush says the new UDP government intends to meet with the UK government at the highest level to establish what the UK’s expectations of Cayman are, and the Cayman government will indicate a willingness to negotiate and sign TIEAs with the UK and other important OECD countries (France, Germany, Canada, Australia and Spain are top of the list). It is anticipated that a willingness on the part of Cayman to engage and take concrete steps to deal with the issues will be viewed positively by such countries which have direct influence over such entities as the OECD.
Bush says that effective and knowledgeable representation will be needed from the Cayman Islands to properly address these important international matters.
He states: “The new Cabinet will appoint a high level negotiating team with relevant technical expertise (from the government and the Cayman Islands Monetary Authority) led by a Cabinet Minister at the highest level and supported by relevant expertise from the financial industry.
We need to immediately appoint a well respected high level person with knowledge of the financial industry to head a new financial services Secretariat and to re-brand it as the Office of International Financial Services Initiatives after careful consultation with the private sector.
The OIFSI will be comprised of members who have in-depth knowledge of the international initiatives in which the Cayman Islands, among others feature, and the local and international regulatory environment.”
Bush says this new body will assist in creating greater synergies between his Financial Services Ministry, the Financial Secretary and, ultimately, the Cabinet.
Bush also anticipates that the OIFSI will work with the Financial Secretary, CIMA and the financial industry to reposition Cayman in terms of markets (China, India, and Brazil being key new markets to pursue) and products focusing on investors who are willing to establish a physical presence in the Cayman Islands.
He went on to point out that an almost complete lack of consultation with industry representatives on key issues had resulted in the absence over the last four years of the legislation the private sector has been pleading for to help Cayman maintain its competitive edge against increasingly aggressive competitors.
Bush states: “Amending existing legislation and adding new legislation is desperately needed. We need to announce the replacement of the Confidential Relationships Preservation Law thereby removing the “bank secrecy” image, coupled with the appropriate privacy legislation which will protect legitimate confidentiality for business and personal purposes. Legislation which attracts international businesses to set up their offices here is also desperately needed.
Bush concludes by saying that his government will implement a training programme to ensure that Caymanians will be ready to fill the necessary posts in a new and repositioned financial industry.
“The future of our economy and our industries depend on how well we cultivate and nurture the brightest and most promising young minds to lead the next generation of Caymanians,” he states. “I plan to soon introduce a new Leadership Cayman programme which will be led from my office as Leader of Government Business. It will invest in the human capital of this nation, and will ensure that our Caymanians will be able to achieve the highest levels of education attainable in order to take their place as the next generation of Caymanian community leaders, business leaders, and indeed, leaders of this country at the highest levels to ensure our prosperity for generations to come.”