Archive for April 27th, 2009
CIFSA and government in conflict
(CNS): The government’s partnership with the Cayman Islands Financial Services Association may be in jeopardy as the two have disagreed regarding the best way to address the issues surrounding the OECD’s grey list. The partnership was formed as a taskforce to co-ordinate the efforts of the public and private sector to address that and other continuing global attacks on the country’s financial services sector. However, CIFSA has written to the Leader of Government Business criticising the amendments to the TIA law and demanding immediate bi-lateral treaties as well as legislative amendments to the CRPL to address what it claims is a mounting crisis in the industry.
CNS has seen letters from both CIFSA and Kurt Tibbetts, who has written back to the organisation reaffirming the government’s commitment to the Tax Information Authority Law passed in December 2008. This law enables Cayman to enter into agreements with OECD countries and others when necessary without a bilateral treaty and has been hailed by government as a masterful stroke to deal with the OECD requirements. Tibbetts also stated in the letter that the government is still committed to the continued pursuit of bi-lateral treaties as well. He further noted that any amendments to the Confidential Relationships Preservation Law would not take place until the next session of the Legislative Assembly.
Writing in his relatively new role as chair of CIFSA, Anthony Travers has told government that members of the association are unanimous in their concern regarding the negative responses being received on a daily basis by clients and the move by institutional clients to take their business to jurisdictions on the so called OECD white list – Cayman’s competitors– and that something must be done immediately.
“We bring this to your attention because we are afeared that if not all immediately available steps are not taken to remedy the current position accelerating and irreversible damage will be done to the Cayman Islands Financial Industry." He states that statistical information regarding the first quarter of 2009 is already indicating that overall transaction flow maybe down as much as 50 per cent.
Travers asks government to take immediate action to implement four more bilateral treaties, as CIFSA places “no value at all” on the treaties signed under the unilateral exchange, and he says that mechanism is not yet fully recognised by the OECD. He suggests, if the law cannot be amended immediately as the House is not sitting, that government make an immediate statement of intent to repeal at least the criminal sanction part of the CRPL. He goes on to impress upon government the gravity of opinion in the sector that the industry is in serious trouble and states that the real time commercial implications are rendering the position of local financial professional untenable.
In his response, Tibbetts notes that it is not the first time Cayman has been blacklisted (although on this occasion it’s grey) and while the government is doing all it can to get on the white list he seems to indicate there is no need to panic. He writes that neither “under” nor “over reaction” are constructive. Standing by the unilateral mechanism, he said efforts were still being pursued to enter into bi-lateral agreements with OECD member states, but he did not react to Travers’ suggestion that to expedite matters the government send the agreements to OECD without the signatures of the involved countries. Tibbetts did, however, state that the government does proposes to repeal the CRPL and replace it with an access to information law and data protection law during the next legislative sitting, but he said announcements relating to this shouldbe carefully managed as he would not want to see it “turn into a self inflicting wound".
The CRPL has thrown controversy between government and private sector before, as government does not see the law as a privacy law and it is understood there are concerns that any move to change it would be interpreted on the global stage as an admission that it actually is a secrecy law. However, the private sector has long said the criminal sanction element of that law goes against the government’s position that it is a gateway rather than a barrier, and it needs to be amended. Tibbetts also noted that government was dependent on CIFSA and the rest of the private sector to alleviate any concerns or misconceptions among the client community about moves in relation to CRPL and how they might be interpreted.
The government made much fanfare of the establishment of the joint taskforce and convened a special press conference on Friday, 13 March, toannounce its creation. Tibbetts said at the conference he was happy that the private sector wanted to collaborate with government in the effort to get Cayman’s message out. “We in government welcome the opportunity to partner our existing efforts and resources with those from CIFSA to augment and diversify our voice on the international stage, particularly in relation to the strength, stability and contribution of the Cayman Islands financial services sector,” he said.
James Bergstrom, one of the Task Force Members present at the briefing, said it was established to build on the significant efforts and actions which have already been undertaken by various members of the private sector, as well as by the Cayman Islands Government. “We believe that CIFSA is the most appropriate organisation through which to co-ordinate these efforts. The make-up of the task force is truly a representative body of Cayman’s private sector and includes bankers, lawyers and accountants. It will also provide the Cayman Islands Government with a more focused contact point for co-ordinating its efforts with those of the private sector.”
Tibbetts stated that he would be holding an industry meeting on Wednesday of this week and hoped a representative from CIFSA would be there. However, the two letters indicate that government and CIFSA are not now necessarily coming from the same position in regards to how they feel the current crisis should be addressed, leaving the effectiveness of this taskforce in question.
Unity at Brac Chamber Forum
(CNS): Although both independent candidates, Lyndon Martin and Maxine McCoy Moore, have noted on the campaign trail the discord between incumbents Juliana O’Connor-Connolly and Moses Kirkconnell, and the tension between O’Connor-Connolly and Martin during the last election was well known (even though they were on the same UDP ticket), at times during the Chamber Candidates’ District Forum on the Brac Friday, 23 April, it was hard to tell whether the four candidates for the two Sister Islands seats were on different teams or a unified force, since they all appeared to largely agree on almost all of the questions put to them and the event remained cordial throughout.
Though there were no questions specifically on Cayman Airways, all the candidates noted at some point during the event the need for improvement in the air service. All said they would take pay cuts as MLAs. They would not control the type of vehicles imported into the Sister Islands but would provide incentives for people to bring in environmentally friendly cars. All were agreed on the importance of diversifying tourism in the Sister Islands. All four were adamant that civil servants should not pay health insurance, and there was general agreement on need for small business development.
All four said they would be willing to take a Cabinet seat if it was offered to them and that it should include responsibility for District Administration, with the two independents saying it should be enshrined in the constitution that one representative from the Sister Islands sat in Cabinet.
Kirkconnell said he had experience with Cayman Airways and business as a whole, and also had an interest in the Development Bank and what that can do for the community. O’Connor-Connolly, the only one with ministerial experience, noted that she had been promised a ministry in a UDP administration. She said she would be willing to try new areas for a ministry position, citing health, sports, youth and education.
Martin said he would be willing and able to accept a ministry, particularly in the areas of youth and education as he had experience as chairman of the Education Board for CB&LC, had sat on the Education Council, and had experience as a lecturer. He also had an interest in rehabilitation and community service. McCoy-Moore said she had always been a strong advocate for education and had served as the Little Cayman Education Service PTA President.
Three of the candidates were satisfied with the recovery progress after Paloma, though O’Connor-Connolly said that initially she was not satisfied at the “pace of revenue” from the government, though now she was. In a bi-partisan gesture, she said, “Both Moses and myself put 110% in the Paloma recovery process.”
Martin said he “differed slightly” and said the initial progress was very slow and even now, six months after the hurricane, the Brac was still not open for business and hotels still not operational. As well as emphasizing the need to make sure the outside world was kept updated, he said this had been the ideal opportunity, while hotels are closed, to elevate and improve the road on the south west of the island so the tourism sector would not be prone to flooding.
Martin called for the immediate passing of the National Conservation Bill when answering a question on the environment, the most strident answer of the four candidates, though all agreed that not enough was being done to protect it and it was an essential part of the tourism product for the Sister Islands. Martin also noted the need to “change basic human behavior” and introduce a recycle programme, an point echoed by McCoy-Moore, who also said she would immediately move the proposed landfill on the Bluff.
Answering a question from the Cayman Islands Financial Services Association, Martin said that only after the industry as a whole recovered and was in good health could it “widen its wings” to the Sister Islands. Once the industry recovered there could be particular concessions to attract business to the Sister Islands, such as reduce company formation fee, and a niche market could be found for the Brac.
Kirkconnell said it was important to understand that the Cayman Islands was not on the OEDC blacklist and a taskforce could be set up to look for ways to attract businesses from jurisdictions that were on the blacklist. He also promoted the idea of back offices in the Brac, starting with government, who should lead by example. He said government must open a company registry office here and improve air service to promote business.
O’Connor-Connolly said the first task of Cabinet would be to re-establish the requisite partnership with the financial services sector – “the experts”. Among other improvements we need to "learn art of negotiations with the Mother Country”, for which there should be "a tripartite of financial partners, NGos and government themselves” to go to London. As for the Sister Islands, she said we should “retool our people” with scholarships for the financial services.
In a discussion on the most critical areas for the district, Martin said he would start by changing the government system of Cayman Brac and Little Cayman, so that ministry decisions were made at the local level covering all aeas of government, echoing an earlier statement by Kirkconnell that the Minster of District Administration should be resident on the Sister Islands.
While the other three candidates stated education, learning the Cayman heritage and more sports as their vision for the youth, Martin said we need to stop judging the young and forcing them into a mold of what we would like them to be.
Fishermen find diver’s body off Dolphin Pointe
(CNS): A visitor from the United States died during a diving trip yesterday (Sunday 26 April) and the Royal Cayman Islands Police Service (RCIPS) says it has begun an investigation into the circumstances of the 58-year-old man’s death. The 911 Emergency Communications Centre received a call at approximately 1.55pm from a vessel which was taking part in the fishing tournament reporting that they had found a diver floating in the water off Dolphin Pointe, West Bay.
Moments afterwards 911 received a call from a staff member of Divers Down reporting that a diver had gone missing while on an organized dive. The fishing boat informed operators that they were coming to shore and performing CPR on the victim. Police and medics responded to the North West Point Dock where the patient was met and taken to hospital. Unfortunately, the victim was later pronounced dead. The man was on vacation in the Cayman Islands from Colorado, USA.
The RCIPS sends its condolences to the family and friends of the victim. Detectives from West Bay are investigating the death.
Police have also said that the Sand Bar is currently closed today (Monday, 27 April) due to inclement weather conditions and a further assessment will be made at 11.30am and checks will be made throughout the day by the joint Customs, Immigration and RCIPS Marine Unit and the Department of Environment. The boating community is thanked for their cooperation.
Anyone with information about crime taking place in the Cayman Islands should contact their local police station or Crime Stoppers on 800-8477 (TIPS). All persons calling Crime Stoppers remain anonymous, and are eligible for a reward of up to $1000, should their information lead to an arrest or recovery of property/drugs.
Rich to flee UK 50% tax
(Times): Two of Britain’s best known entrepreneurs are considering leaving in protest against Alistair Darling’s new 50% tax rate, as leading figures from business and the City warn of a talent exodus. Hugh Osmond, the pubs-to-insurance entrepreneur, is thinking about a move to Switzerland and Peter Hargreaves, the £10 million-a-year co-founder of Hargreaves Lansdown, the financial adviser, is looking at the Isle of Man or Monaco, with more likely to follow. Osmond, whose net worth is estimated at £230 million, said: “A lot of people will be off. It’s highly unlikely that I will continue to have the UK as my country of residence. …"