Prime Minister David Cameron’s recent remarks underscoring the unfairness of referring to overseas territories as “tax havens” is welcomed by Cayman’s financial services sector. Now, if only the media – including Hollywood – would follow suit, there would be reason to stand and applaud.
“I do not think it is fair any longer to refer to any of the overseas territories or Crown dependencies as tax havens. They have taken action to make sure that they have fair and open tax systems. It is very important that our focus should now shift to those territories and countries that really are tax havens. The Crown dependencies and overseas territories, which matter so much – quite rightly – to the British people and Members have taken the necessary action and should get the backing for it.” (U.K. Prime Minister David Cameron, Sept. 9).
Mr. Cameron’s statement that he no longer feels it is fair for overseas territories to be referred to as “tax havens” represents a potential turning point for centers such as the Cayman Islands.
For years this jurisdiction has fought to defend its image as a reputable place to do business. Since its inception, a key part of Cayman Finance’s mission has been to promote the integrity and transparency of the Cayman Islands as a financial services jurisdiction.
This task has been very challenging, in part, because the media both domestically and internationally has for years continued with the perception of an on offshore finance world of the 1980s, where virtually no country had systems or even legislation to fight financial crimes, such as money laundering, like the frameworks seen in many financial centers today.
Of course, the Cayman Islands has always been a leader in the area of regulatory frameworks to fight money laundering. History demonstrates this jurisdiction was the first president of the Caribbean Financial Action Task Force (CFATF), one of the first IFCs to establish anti-money laundering legislation, and today continues to receive impressive positive assessments of its regulatory regime when compared to that of other major financial centers.
But we have found the media, including news and those in Hollywood, has not kept pace with these developments over the past two decades and instead has chosen, perhaps conveniently, to portray jurisdictions such as the Cayman Islands in a negative light.
While we would have preferred to see statements such as Mr. Cameron’s a decade or so earlier, we are grateful this hard earned acknowledgement has surfaced.
The Cayman Islands Government and Cayman Finance have always made it very clear we will continue to adhere to global regulatory and international cooperation standards, but we will only give our full commitment where the playing field across both on and offshore centers remain a fair one.
In that context, Mr. Cameron’s statement reflects what we hope is a change in attitude towards IFCs and one which lays some foundation for a fairer approach to the various assessments of IFCs when regulatory changes are being discussed.
Cayman Finance believes the acknowledgement by Mr. Cameron is important not only because it is fair and long overdue, but also because it comes from one of the most important leaders in the ongoing debate about tax evasion and avoidance. Going forward, this acknowledgement by the U.K. should serve as support toward our future messages about the Cayman Islands because it is finally some form of evidence that what we have been working toward for the best part of two decades has been effective.
This success is a direct result of the actual improvement in the effectiveness of our regulatory framework, and it is also strong evidence the perception of our jurisdiction as a place to do business is changing in a positive light. We can only hope the international media and Hollywood will now follow suit.