Travers dismisses Foot report
(CNS): The chairman of Cayman Finance, Anthony Travers, has dismissed the recent report by Sir Michael Foot, suggesting it is of little consequence. Pointing out the omission of any reference to the most recent FATF report regarding Cayman, Travers also suggests Foot’s report is too general and there is little that Cayman need do in response. Foot’s review of the UK’s offshore financial centres, which was published on Wednesday, makes a number of recommendations for all the territories and also raises specific concerns about economic mismanagement in Cayman and the problem of a limited tax base both here and in other territories.
However, Travers said he believed the report is "much ado about nothing”.
“Apart from a passing and justified concern over the recent short term funding problems experienced by our new government, the report is notable in that it acknowledges the enormously important role Cayman plays for the City of London and Wall Street, and that business is unlikely to shift from the offshore jurisdictions to the UK.
“The report strangely omits reference to the most recent FATF report, which describes the Cayman Islands anti-money laundering systems as superior,” Travers noted.
The Cayman Finance chair also stated that the understanding displayed of why fund structures utilise the Cayman Islands appears superficial and that Foot’s suggestions with respect to VAT fail to analyse properly the effect of import duties.
“As a matter of academics, the report is not helped by the generalised nature of its conclusions but which, on specific application to the Cayman islands legal and regulatory regime, do not suggest that any immediate action is required,” he added.
Although Foot’s report offers a general assessment of all nine territories, he says that a detailed explanation of the differences between the jurisdictions would not have served the objective of the report, which was to give the United Kingdom an idea of its risk and exposure as a result of the situation in all its dependent territories.
Foot also noted that, while his recommendations may not apply in the same weight in every territory, he warned that none of the jurisdictions reviewed could afford to be complacent and there were common themes. “Most are heavily reliant on financial services and tourism for economic output, government revenue and employment,” he said. “It was clear early in the review process that economic decisions taken by some of the jurisdictions during the long period of economic growth had weakened their resilience in a downturn.”
He noted that some of the territories faced difficult decisions and would need to look afresh at options for controlling public expenditure and increasing revenue. Given the recent correspondence between the UK and the CIG, it would be fair to assume that Foot considers Cayman to be one of those jurisdictions. Foot also makes it clear that Cayman is one of the territories which were severely impacted by the global economic crisis that depleted the public sector cash reserves, made worse by the Cayman Islands government’s own actions.
“Decisions taken by some of the Overseas Territories to use increased revenues to raise current and capital public spending, sometimes combined with insufficient attention to data quality and the absence of robust medium-term planning, has left local governments facing difficult short-term choices to restore the public finances. This is clearly illustrated by recent events in the Cayman Islands,” Foot wrote.
In his report Foot makes a number of specific recommendations, which he says all of the dependencies and territories should consider and measure themselves against. He also recommended that the UK make it clear to the jurisdictions the respective responsibilities and expectations between it and the territories. The quality and extent of financial planning in the jurisdictions should be aligned with the best performers, which he said were the crown dependencies.
“In particular, jurisdictions should implement a prudent approach to managing government finances by developing: a diversified tax base to maximise sources of revenue; mechanisms to measure and control public spending; and by building financial reserves during periods of economic growth,” he added.
The UK should also be proactive in satisfying itself that the territories are capable of identifying and responding to external shocks, and encouraging local governments to undertake responsible adjustment programmes where these are necessary, Foot said.
Among other recommendations, Foot also set out the need to meet international standards on tax transparency and that the UK should press for improvements in ‘know your customer’ minimum standards. Furthermore, he said all jurisdictions should have independent regulatory regimes and recommended that jurisdictions without an ombudsman scheme consider adopting one.
Category: Headline News
The plain fact remains that the Foot Report will exist in perpetuity while Mr Travers rantings will be soon forgotten.
It is unfortunate that Cayman does not embrace a more "mature adult at the table" approach and treat the Report with respect for its recommendations while highlighting any substantive defects. Instead Mr Travers continues to burn our international bridges by behaving like a "spoil child who still isn’t allowed a place at the table". We should not forget that Michael Foot is likely to be a key architect in the new financial regulatory structure of the UK and is likely to have a significant impact on Cayman’s future business flows. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6389920/Tories-ask-City-grandees-to-advise-on-regulation.html
Where is the evidence of any international diplomacy being employed in Cayman’s use of Mr Travers as its official mouthpiece?
Guernsey response…
http://www.hedgeweek.com/2009/11/02/guernsey-welcomes-conclusions-foot-review
CNS – In the quote attributed to Mr Travers regarding the recent report, was the quote completely accurate. A quick check suggests that it was the CFATF and not the FATF that produced the most recent report on Cayman’s anti-money laundering systems.
It would be nice if criticism of our prominent critics was as accurate as possible so that we don’t look doubly ineffective.
If this is the best you can do to attack Mr Travers you really are quite a sad person. Do you perchance work at a legal firm?
I agree these attacks on Tony Travers are clearly motivated by jealousy – I know that caymanians like myself really appreciate all that this gentleman is doing to uphold the name and reputation of cayman and long may he continue.
If he speaks out you can bet your last dollar he is right on the money
Keep it up Tony
Mr Travers is ,of course, correct. The most recent evaluation of the Cayman islands system of anti money laundering was undertaken by the FATF but the report had limited circulation .
No doubt this was because the Cayman Islands core principles were ranked in it as being superior to those of the UK and the USA. However it is inconceivable that the report was not made available to Mr Foot or that he was not aware of it. If it was not he should say so and give an explanation or the conclusions of the report questioned.
Given the international regulatory standards and the standards of transparency that apply in the Cayman Islands on tax ,anti money laundering and regulator to regulator disclosure generalist comments that “Things need to improve offshore “,which can be summarized as the extent of the Foot Report’s recommendations are of very little specific assistance to anyone save the press to whom the report was leaked in accordance with the now standard practice.
The only relevant approach going forwards is to engage on a specific analysis of the degree and extent of Cayman transparency under specific legislation and to undertake a comparative analysis of that standard as against the standards applied in other offshore and onshore jurisdictions. Had the Foot Report done so properly it would have concluded that Cayman’s overall transparency as a matter of fact rates to a higher standard than that of any offshore jurisdiction and most if not all onshore jurisdictions .
This is notably so with respect to tax disclosure under the EUSD where Cayman provides complete transparency yet the Crown Dependencies still maintain the secrecy of the withholding tax arrangement .The Foot report fails to deliver a specific gap analysis.
The Report serves a Eurospecific agenda but its conclusions , in so far as Cayman is concerned, should be taken with a pinch of salt. Its message is political not technical.
Well said Fact Checker
Its a shame that the original poster wasnt so au fait with what is really going on – however what is clear is that they were merely trying to find a way to trip Travers up like many others who I agree probably work at certain law/ finance firms
FACE IT YOU ARE NOT SMART ENOUGH TO OUTSMART TRAVERS EVEN ON HIS WORST DAY !!
KEEP IT UP TONY
Hopefully he has training as a figure skater so that he can avoid dizziness with all that spinning.
Anyone who knows anything about this knows its not spin –
Travers as is his right is commenting on Foots comments – what do you expect him to do – he is the Chairman of Cayman Finance .
Figure skating ?? His sport is skiing from what I have heard
Telling it like it is ! We can always rely on Mr Travers to cut to the chase , keep up the good work .
Representatives of the finance sectors in Jersey, Isle of Man and Guernsey welcomed the report and its comparatively positive statements relating to those jurisdictions and they will no doubt be using the comparisons (nicely presented in chart form) in promoting their jurisdictions. Mr. Travers not so much.
That is not a criticism of Mr. Travers. "Tough it out" may be the right or perhaps the only approach in the circumstances given the unfavourable comparisons. Time and who is effective in persuading the clients and officials in the G20 countries will tell.