Archive for March 7th, 2011
Financial crisis could happenagain, warns King
(Guardian): Britain risks another financial crisis unless it undertakes fundamental reform of the banking sector, the governor of the Bank of England has warned.Mervyn King said "imbalances" in the banking system remained unresolved and were "beginning to grow again".He criticised high street banks for routinely exploiting their customers and urged them to take a longer-term approach to their business rather than simply trying to maximise profits. “We allowed a [banking] system to build up which contained the seeds of its own destruction," King said.
Tough questions to be asked on FATCA, says expert
(CNS): New rules in the United States will have a significant impact on the offshore industry, Tim McCarthy, an expert with RBC Wealth Management, revealed in a recent executive lecture at the International College of the Cayman Islands business school. Although the Foreign Account Tax Compliance Act, known as FATCA, does not come into effect until 2013, Cayman and other offshore banking jurisdictions face tough questions on handling US accounts and wire transfers, the professional told his audience recently.
Implementing FATCA regulations means that offshore bankers will be having conversations with their US clients about declaring their foreign assets or in some cases giving up US citizenship or green card status. Other offshore bankers are choosing to no longer deal with US clients.
Connected to the US HIRE Act, signed by President Obama last year to encourage businesses to hire new workers, the FATCA portion of the new law will have wide ranging impact on foreign banks. All wire transfers around the world using US currency must pass through a US bank regardless of the starting country or final destination. Once the wire passes through the American bank, the US Internal Revenue Service effectively has control on how that transfer will be treated for tax purposes.
If the foreign bank agrees to provide account details on its US or green card holding clients, the wire will pass through with a transaction fee. But if the foreign bank does not comply with FATCA provisions, all wire transfers going through US banks will have 30 percent automatically withheld as tax.
Industry leaders in the UK recently said it could cost millions of dollars to comply with the new US regulations describing it as "nightmare" and have suggested that some smaller operators may pull out of the US rather than pay a high price to comply with the act.
More details of the act are expected this summer but the global financial industry is expecting the act to make a significant impact. Tom Aston, a tax partner at "big four" accountancy firm KPMG recently told the UK press that banks there have gone through the “process of anger and denial” but realise they have to deal with it.
"Pulling out of America could be a knee-jerk reaction from smaller players, and I know a lot of them are looking closely at what FATCA will mean for them. This is a big burden for the banks on top of all the other new regulations and requirements being imposed on them after the financial crisis," Aston added.
He also warned that if the US receives a large increase in tax revenue following the enforcement of the FATCA then other jurisdictions, including the EU, may follow suit.
Cops tackle w/end crime spike
(CNS): The police had their hands full throughout the weekend with more robberies as well as arrests of suspected robbers. Between Thursday and Sunday there were three armed robberies and an attempted armed robbery, in which the gunman left empty handed. The police arrested a man suspected of robbing Three N’s grocery store on Saturday night and formally charged the two men who were arrested in the wake of Monday’s Tortuga Robbery on Friday afternoon. However, the cops are still hunting for the two armed men who robbed the Countryside Pizza Hut on Friday night and the two robbers of the DVD Store on Walker’s Road Thursday evening, one of whom pistol whipped the cashier. (Photo Dennie Warren Jr)
The weekend crime spike comes at a time when, despite significant arrests by the police, robberies of small businesses continue to soar. The crimes are taking place day and night across a number of districts on Grand Cayman and in most cases the perpetrators are escaping with only small amounts of cash. Saturday’s grocery store robbery was the 17th robbery of 2011, making an average rate of one incident every 3.2 days.
Last week started with a robbery in the middle of the afternoon when two men entered the Tortuga Rum shop by the Cracked Conch restaurant around 2:30pm, on a busy cruise ship day in West Bay’s tourist hub. The men threatened staff before fleeing with cash but no one was hurt and no shots were fired. The men were reportedly spotted leaving the crime scene in a green Hyundai motor car, which police stopped shortly after the robbery on Easterly Tibbetts Highway and three men were arrested. Two men, aged 22 and 33, are expected in court this morning (Monday).
On Thursday evening at around nine o’clock two masked men entered the DVD Store on Walkers Road, one of whom was armed with what appeared to be a gun. The robbers threatened the store clerk and demanded cash. Despite receiving money, one of the robbers hit the cashier before leaving the store with the gun but no shots were fired and the cashier did not require any medical attention. The suspects are described as both being around 5’5" in height. They were wearing dark clothing and had their faces covered and so far have not been apprehended.
On Friday afternoon a man wearing a t-shirt around his face attempted to rob a small landscape business in George Town. At around 2:45 pm he entered Qualscape Ltd, in the DMS Building on Eastern Avenue, threatened a female member of staff and demanded cash. According to a police spokesperson, the woman hid under a desk before managing to run from the building. The suspect then threatened other staff members without success. After failing to get any cash, the would-be robber fled empty handed into nearby bushes. The suspect was described as being around 6’3" in height, slim build, and dark brown complexion, wearing a white shirt and blue pants.
At about 9:15pm on Friday night two suspects entered Pizza Hut, one armed with what is believed to be a gun and the other with a machete. Police said the robbers threatened staff with the weapons and demanded cash before making off with the money towards the rear of the building. Described as having white masks covering their faces, the first robber was said to be about 5’4" in height, skinny build, wearing a dark long sleeved top and grey pant suit and his accomplice about 5’7" in height, medium build, wearing a long sleeved top and grey pants.
Then on Saturday evening a lone gunman entered Three N’s grocery store in Batabano Plaza, West Bay, at about 8pm. According to the report, a man wearing a mask threatened staff and demanded cash. The suspect made off with what was described as a “small sum of money” but no shots were fired and no one was injured in the incident. A short time later, following a police operation in the West Bay area, a man was arrested on suspicion of robbery. Police said that he remains in custody.
Police have also confirmed that two jewel thieves that may have arrived by cruise ship walked away with expensive jewellery from a downtown store in George Town last week. “We received a report late Monday morning that two men, suspected to be tourists, had stolen a high value bracelet and necklace from Effy in Fort Street,” a police spokesperson said. Enquiries being made with cruise lines and hotels in the area but as yet no arrests have been made.
Anyone who has any information which could assist any of the enquiries is asked to call West Bay police station on 949-3999, Bodden Town on 947-2220, George Town on 949-4222 or the confidential Crime Stoppers tip-line 800-8477 (TIPS).
Hurricane Hunter aircraft to visit Cayman
(CNS): NOAA and the US Air Force Reserve are planning a series of public events later this month in the Caribbean region and in Mexico, to urge residents to prepare for the 2011 hurricane season. According to a release from NOAA tours of the Air Force Reserve Command’s WC-130J “Hurricane Hunter” aircraft will be available to residents along with the opportunity to meet US National Hurricane Centre Director Bill Read and other hurricane specialists and meteorologists from NOAA. The Hunter is scheduled to visit the Cayman Islands on the afternoon of 23 March.
“The 2010 season was one of the most active on record with the most significant impact occurring across the Caribbean and Latin America. The next hurricane season begins on June 1st and we want coastal residents to be ready for it,” said Read. “Lives and property are saved through awareness and preparedness.”
Since 1944, military air crews have been flying directly into the core of tropical cyclones to gather critical weather data. Today, the data are sent in real time via satellite from the aircraft directly to the National Hurricane Centre for analysis and use by hurricane forecasters. During the 2010 hurricane season, the 53rd Weather Reconnaissance Squadron flew 100 missions in the Atlantic, covering 127 centre fix requirements and 15 investigative flights for the National Hurricane Centre.
"The squadron is the only remaining military unit in the world which routinely flies into tropical cyclones to aid in the United States Hurricane Warning Program," said Lt. Col. Jonathan Talbot, 53rd Weather Reconnaissance Squadron chief weather officer.
Cayman signs up to save North Sound
(CNS): Organisers of the Save Cayman campaign were out on Saturday looking for support for their petition to stop the dredging of the North Sound. Captain Bryan Ebanks, who is spearheading the campaign against government’s proposal to dredge a channel in the sound, was in West Bay collecting signatures from the premier’s own constituents, many of whom are opposed to the channel, despite the premier’s comments on Thursday when he asked people not to sign. Claims by the premier that a channel will protect the Sound and won’t put the Sandbar at risk don’t seem to have convinced all of the wider public.
Speaking to CNS outside Foster’s Republix on Saturday afternoon, Cptain Ebanks said he hoped the petition could make a difference. “We have no choice, we have to do this and we are aiming to collect enough signatures to trigger a referendum,” he said. “Once the dredging is done and we see the damage, it will be too late then.”
Under the country’s 2009 Constitution, if 25% of the electorate support a referendum on a specific topic then the government is legally obligated to pass a law to allow a people initiated vote to take place and is bound by its results.
Despite hoping to get the necessary 3,000 or so voters’ signatures, the Save Cayman campaign is not limiting signatures to those who are on the electoral register. They have also been including frequent visitors to Cayman as well as residents, work permit holders and Caymanians that are not registered to vote in order to demonstrate to both the governor and the government the wide opposition to the proposal to dredge the channel they believe exists.
On Thursday the premier moved from his previous position that the channel was necessary and he would be going ahead regardless to stating that if an environmental impact study showed the Sandbar was at risk he wouldn’t go ahead. However, he has stated frequently that he believes the channel will do no harm and again in his Thursday evening television broadcast he said he believed it would be good for the North Sound.
The Save Cayman campaigners have raised concerns that unless the environmental impact assessment, (EIA) is independent and the Terms of Reference set down fully by the Department of the Environment it could produce skewed results. In the petition the campaigners ask for an independent EIA, an economic impact study and a feasibility study all to be made public before the project is considered.
Over the years a number of reports and studies have determined that open water dredging of the North Sound and its coastline has resulted in increased turbidity and a significant decline in water quality and underwater visibility, and more will not, the campaigners say, improve the situation as the premier has suggested in a number of speeches recently.
This new project proposes a 200 metre wide channel cut through the reef, which the premier claims will be no more than 20 feet deep, and envisions two artificial islands that are said to be a mile in diameter. Dredging to remove a portion of the reef and to create artificial islands in the North Sound will cause changes to current patterns and to water quality, the campaigners say.
As far back as 1998 the people who worked on the Cayman Islands National Strategic Plan – Vision 2008 – said then that legislation had to be passed prohibiting further dredging or excavating operations in the North sound and it should be placed on a National Registry of Environmentally Protected Areas, none of which happened.
Print off the petition below or non-residents can go to the online version
See more about the campaign to save the North Sound here or vote in the CNS poll
Electric hybrid beats law
(CNS): The first electric car which is legally allowed on the country’s roads was handed over to its new owners, CUC, on Friday. The Chevy Volt, which has a generator to recharge the batteries that drive the car, is a unique hybrid that has escaped the Cayman Islands’ law, which normally prohibits electric cars, because of this engine. John Felder of Cayman Automotive realized part of his dream on Friday at a special ceremony at the vehicle licensing office, but while the Volt was licensed by the authorities, the Zenn, which is a purely electric vehicle, is still not legally allowed on the roads. However, the chief officer in the ministry promised the law would be changed by May to facilitate all types of electric cars. (Photos Dennie Warren Jr)
Felder has been trying to bring electric cars to Cayman for many years, following Sonny Ryan, who brought the first electric car to Little Cayman in 2004 but who died before he was allowed to use it on the road.
“I couldn’t sleep last night, I was so excited,” Felder said as the car was unveiled. “But I’m not doing it for me I’m doing it for the people of the Cayman Islands,” he added, as he described the long road to getting the car to Cayman.
The Chevy Volt smart car is at least a step in the right direction, Felder said after the ceremony in which he announced that Cayman Automotive would be establishing a scholarship in honour of Sonny Ryan for young people who want to study modern auto-mechanics. “The industry is changing and we need young people who will be able to repair and maintain this kind of vehicle,” he said.
The car, which is highly sought after and has a waiting list in the US of over 200,000 drivers, can be plugged in at home and has a range of over 35 miles before the generator has to recharge the batteries. When running on gas the car gets the equivalent of around 90 miles per gallon, which is believed to be highest ever for a car made in North America.
As the stylish vehicle was unveiled, the premier, who drove it to the inspection pit, said he would talk with his Cabinet colleagues to see if the duty on the car could be reduce by 10% as cars in its class currently have a duty of around 40% on them. Although a welcome gesture, with so many people on the waiting list it will be some time before anyone other than CUC employees will be enjoying the pleasure of this green and silent vehicle.
Felder has not given up on his goal to bring in fully electric cars that have no combustion engines and use no gas, which Kearney Gomez said will be legal by June. Once these cars (a fraction of the cost of a Volt) are allowed on the roads, Felder said he would be pursuing the goal have having solar powered charging stations on the island offering a truly green alternative to drivers. These cars are also expected to have a greater reduction in duty as they are considered fully green items.
Gomez said that there had been a lot of complex changes to the traffic law, which was why it had been a long time coming. “We are very, very close to finishing this comprehensive piece of legislation and it will make it to the Legislative Assembly before June,” Gomez promised.