UK ‘reviewers’ due in March

(CNS): A statement issued by the Portfolio of Finance and Economics has revealed very little about a recent meeting between Cayman Islands government representatives and UK Financial Services Secretary Paul Myners in London regarding the review into British offshore financial centres by the UK government, due to take place shortly. The review was announced by Chancellor of the Exchequer Alistair Darling during last year’s UK budget speech, and despite acknowledgement by Lord Myners over Cayman’s compliance, a team will still be coming to Cayman in March.

During his time in London for the constitutional talks, Leader of Government Business Kurt Tibbetts and others met with Myners and Michael Foot (pictured above), head of the independent review. The statement from the portfolio said that Myners shared “perspectives” on various matters, including Cayman’s strong compliance record in the financial services arena and areas for mutual interest.

Foot told the Cayman Islands delegation about the approach and procedure to be adopted in the context of the review, including confirmation that the review will incorporate an on-site component, with the first visit to occur in the second week of March.

These details were not revealed in the release, however, and no explanation of why, given the acknowledgement of Cayman’s adherence to international regulatory regimes, a site visit was required. Nevertheless, Tibbetts said the CI government was pleased to have secured the important meetings.

“We were particularly struck by Lord Myners’ level of knowledge about Cayman’s compliance achievements and were delighted to establish with the new financial services secretary a sound footing for a constructive relationship going forward,” he said.

Last year Darling said in his pre-budget  speech that the current global economic crisis had highlighted potential problems in the UK territories with offshore financial service industries as they attract banking customers with lower taxes – without contributing to the UK Exchequer.

Despite the fact that last year the UK Treasury Committee began an inquiry into offshore financial centres and invited them to submit written evidence for the report, which has yet to be released, the UK Chancellor says he has asked for a review of the regulatory arrangements surrounding territories and dependencies, which will report to him in the spring of this year, he says.

Minster Alden McLaughlin, who accompanied LoGB to the meeting, said last year that the review was more concerned with the Crown dependencies than with the overseas territories but that Cayman was a target as the UK government remained under pressure given the economic crisis, though its fundamental causes were firmly rooted onshore.

“Whatever the real reason, given the global economic crisis, it is to be expected,” McLaughlin told CNS. “This is not driven by local circumstances but we have no difficulty with it and we expect, as ever, that the Cayman Islands will score highly.”  

According to information released earlier from the UK, the review will identify opportunities, current and future risks (and mitigation strategies) to the long-term financial services sectors of territories and Crown dependencies, including financial supervision and transparency; taxation in relation to financial stability, sustainability and future competitiveness; financial crisis management and resolution arrangements; and international cooperation.

Attorney-General Sam Bulgin, QC, and Deputy Financial Secretary (Financial Services) Deborah Drummond also attended the meetings.