Archive for April 14th, 2011

Jury proposals raise concerns

| 14/04/2011 | 50 Comments

(CNS):Proposals to recruit permanent residents to serve on juries has met with opposition and concerns. Argumentsthat this would undermine the most fundamental human right of being tried by a jury of one’s peers and that without the right to vote there should be no obligation to serve have come from the community at large, the political arena and from academia. Former UDP minister and UCCI president Roy Bodden described it as “dangerous”, while the MLA for North Side said the jury was one of the last places where Caymanians were still properly represented in the justice system. Meanwhile, vocal public opinion against the idea is emerging from both locals and ex-pats, who for different reasons oppose the proposals.

Opposition from the community is coming from two sides: some permanent residents oppose the suggestion as they say that because government excludes ‘ex-pats’ in the democratic affairs of the country it should not be able to include them when the situation suits. The view that unless expatriates have the right to vote they should not be expected to sit on juries, which is seen as undemocratic, has been expressed on the CNS comments board and elsewhere in local public forums.

On the other hand, opposition coming from Caymanians reflects the idea that it would be fundamentally unfair to allow a person from overseas without real ties to the community and culture to decide the fate of a local charged with a crime. This view was also articulated by UCCI President Roy Bodden, who said the move would not only be precedent setting but it would also be dangerous as it deprives people of their most sacrosanct human rights.

“I have done a quick search and from 1700 BCE when Hammurabi published the modernising Code of Hammurabi, down through the era of the great Roman Empire, no such precedent existed,” Bodden stated. “Even Pericles, the great Athenian and the Father of Democracy, stopped short of such an unwarranted gift. Fast forward through the centuries of European domination of the then known world and no imperial power would dare think of empowering aliens to sit in judgement over their citizens.” Bodden added. “There is no compelling reason why any society would wish to surrender such a responsibility to persons who have yet to prove their allegiance and commitment to their proposed adopted society.”

He questioned how far such a precedent could go, not least the possibility of allowing non-citizens the right to vote. “As I see it, citizenship in the Cayman Islands, cheapened already by multiple competing interests, will be devalued into worthlessness,” the UCCI leader said.

MLA Ezzard Miller also said he objected to the proposal as he felt that this was the last stop in the justice system where Caymanians maintained a level of comfort that they would face their peers, given the traditional domination of the criminal justice system by ex-patriates, from the police through to the judiciary. Miller said he felt the problem the proposal was trying to address would be better resolved by looking at the system.

“It is the system that needs to be addressed to assist in jury selection, such as legislation compelling employers to allow employees the time off to serve without penalty,” Miller said. “It is not that Caymanians do not want to serve but is the problem of getting people to the court.” Furthermore, if jurors could park without risk of getting an $85 dollar fine when serving, that alone would swell the ranks of willing citizens.

The system has also been criticised in the wider public domain, with many Caymanians claiming they have never been called to serve, despite being on the voters list for several years, while others complain of being called to pools more than once.

The proposals to expand the jury pool which forms part of a draft amendment bill is currently in the public domain for comment. The issue has arisen as a result of regular and very real problems of finding people to serve as jurors who are not related or connected in some way to the accused, the witnesses or even the attorneys involved with a trial. The combination of close connections and the right of both the crown and the defence to challenge jurors means the selection process can be long and drawn out.

On one occasion last year at a trial that involved four defendants the entire jury pool was exhausted and the court staff were forced to take to the streets of George Town to find people eligible to serve on only a seven man panel.

Anyone wishing to add their thoughts to the bill should contact Tesia Scott in the Attorney General’s Chambers, 4th Floor, Government Administration Building or by email by Friday, 6 May.

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Ministry hosts local seminar on new US tax bill

| 14/04/2011 | 17 Comments

(CNS): People holding a US passport who live in the Cayman Islands may owe back taxes to the American government as a result of new legislation. The Premier’s Office and the Finance Ministry with the local industry body, Cayman Finance, will host a seminar next week on US tax obligations for Caymanians with US passports, US citizens, Green Card holders, long term non-residents of the US, and financial institutions on the directives of the Foreign Account Tax Compliance Act (FACTA). The law, which will come into effective January 2013, seeks to enforce reporting of US held foreign accounts andimposes a 30% withholding tax on foreign entities that refuse to disclose US account holders.

In his role as Finance Minister, McKeeva Bush said, “It is imperative that all US citizens, Green Card holders and long term non-residents that live and work in the Cayman Islands understand their obligations to the US Treasury and the IRS, ” and he invited the public to attend the free session. “I encourage all Caymanians with US Passports to attend this event, as well as those who are unsure of the filing and reporting procedures for US income taxes under the new act,” Bush added.

The seminar will take place on Tuesday, 19 April, at the Marriott Grand Cayman Resort. In the morning session between 9:00am to 12:30pm the focus will be on financial institutions to increase their understanding of the new criteria surrounding US taxes for their clients.

Discussion areas include an overview of FACTA; an analysis of the legislation and the implications for Cayman residents; the Cayman Islands Government delegation’s meetings with the IRS; and opportunities for Cayman.

In the afternoon session between 1:30pm and 5:00pm the position of US Citizens, Green Card holders and long term non-residents will be examined. Organisers say it will provide valuable information for individuals who were born in the US or have family members that were born in the US with regards to tax requirements. Topics include: tax and reporting obligations – what you may owe; filing US income tax returns; and where to find assistance from local firms.

A networking reception from 5:00pm to 7:00pm is also open to the public and will provide an additional forum to network with the presenters and government officials.

The bill was passed in March last year to prevent offshore tax abuses and the implications of the new withholding regime are wide-ranging for financial institutions, investment entities, and many other organisations that operate on a global basis. Foreign banks and other financial institutions must reach an agreement with the IRS and identify US accounts or they could subject their owners to a 30 percent withholding tax.

The definition of affected foreign financial institutions (FFIs) is broad and wide-ranging, and includes entities that manage investments, including alternative investment entities and insurance companies.

Non-financial foreign entities (NFFEs) will be required to disclose whether they have any 10 percent U.S. owners. NFFEs that fail to document the existence or non-existence of US owners may be subject to the 30 percent withholding tax regime.

For more information on FACTA see KPMG fact sheet 

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Levin urges laws to close tax loopholes

| 14/04/2011 | 0 Comments

(Detroit News): As taxpayers around the country scramble to file their income tax returns by Monday, Sen. Carl Levin pushed again for closing corporate tax loopholes and urged his fellow Capitol Hill lawmakers to take a tougher stance on US. intervention in offshore tax havens. For most Americans, paying taxes is a painful but "patriotic duty to a country we love," Levin said. But those who want to cheat "know where to hide their money." Levin was speaking at a breakfast briefing in the nation’s capital on tax havens. Also at the breakfast, British author Nicholas Shaxson was introducing his new book on international tax policy and corporate tax cheating, titled "Treasure Islands."

As chair of the Senate’s Permanent Subcommittee on Investigations, Levin has spent the past decade directing the committee’s staff to investigate how corporations and individuals in the United States have used a system of loopholes to avoid paying taxes to the tune of $100 billion in lost revenue annually.

In the afterglow of Congress’ government shutdown showdown last week, Levin noted if that $100 billion in lost revenue was recaptured by the Internal Revenue Service, "last week’s debate could’ve been far different."

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London still top for hedge funds

| 14/04/2011 | 0 Comments

(Reuters): While banks may be thinking of moving their headquarters from the UK to dodge new regulations, London’s status as the centre of Europe’s hedge fund industry looks secure. The UK capital, second only to New York as a hedge fund hub, is even luring back some managers who decamped to Switzerland to escape heavier taxes and regulation. Executives cite London’s proximity to investors and service providers and the lifestyle it offers. "London is still the centre of the hedge fund universe in Europe," said Andrew Rubio, chief executive of Throgmorton, which provides back-office services for hedge funds including Brevan Howard, one of Europe’s biggest hedge fund firms. "It’s where the distribution channels and the networks are … If you want to be successful, you have to have a presence in the UK."

Some banks are considering moving their headquarters from the UK if the government brings in tough rules to try and avert another banking crisis.

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Mac argues for development

| 14/04/2011 | 44 Comments

(CNS): The Cayman Islands must have more physical development if the local economy is to survive and prosper, the premier has stated. McKeeva Bush said those who were opposing all development were standing in the way of creating new economies. He said there were developers who stood ready to invest millions of dollars of their own money, which would generate jobs and business, while people stood around “hemming and hawing”. With a decreasing population and the continuing economic crisis, Bush said he was committed to sound development for the Cayman Islands and would encourage those developers to invest before they took their money elsewhere. (Photo Dennie Warren Jr)

At this week’s public meeting in North Side Bush warned that other jurisdictions in the region were wooing local developers here to get them to develop in other Caribbean locations, such as Jamaica. He said he would do what he could, however, to get them to invest here, adding that he would offer concessions if it got local people back to work.

“We need diversification,” the country’s leader said. “We will not see the past growth in financial services and tourism again. We new areas.” Bush said that the standard of living Caymanians had enjoyed in the past was a direct result of allowing people to invest and of allowing people to come and spend their money. “We cannot go back to being in the poor house.”

His goal was to create an environment where people could make money, he stated, and he criticized the negativity people had towards development projects. “Everything is wrong,” he said, reflecting on what his critics were saying. “There something bad about everything the government is trying to do,” but no one was coming up with any better ideas, he added.

“No one has come up with a plan to create jobs and plan the future for these islands. It is easy to talk," Bush said. “I ask them to tell you how they will give you a better future. We don’t have any industry to get funds for what we need todo. We have to prepare ourselves for the next time there is an economic crisis.”

The projects that he intended to support would create a sustainable future, he said, as he questioned where the money would come from to give scholarships to the 400 school children graduating or to create new jobs if Cayman did not allow the projects and instead ran away the companies. “We need wealthy people to come here and invest. If we can get some of the projects off ground and get over stumbling blocks, people will have work and … people will get business,” he added. “Everybody wants something but no one wants to change anything.”

People needed to get the facts before they criticised, the premier declared, as there had been misinformation about the various projects he supported. In particular, he said that when people said there were plans to dredge the North Sound “nothing could be further from truth,” as the plan was for a small channel. Bush added that he was not going to support any development that scientific evidence says would damage the natural assets. Before agreeing on any project, he said he needed to know it won’t harm the Sound.

“No work will begin until EIA study completed by a world class team of marine biologists and engineers familiar with the North Sound and the Caribbean …The EIA will be completed in a transparent manner and with the Department of Environment and funded by the developers.”

He claimed it would enhance the existing environment but he would make sure there was no damage to the Sandbar, Rum Point, the marine wildlife or the overall environment before the channel was developed.

In face of the opposition in the district about the proposed East End Sea Port, he revealed that there was still no formal proposal before government for that project. The developer was waiting on the findings of his own environmental impact study, the premier said. But he said government would support the proposal if the concerns are met.

One of the best development proposals, he said, was for the special economic zone, which would attract science, technology and new media to the islands. Bush said so far at least he had not heard that project criticized but he suspected it would be in time as everything was criticised.

“We know we will be criticised as you expect that in a democracy. I just wish it was a little less,” the premier concluded.

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