LOGB Press Briefing Statement
LoGB WEEKLY PRESS BRIEFING STATEMENT 12/3/09
KEY DEVELOPMENTS IN INTERNATIONAL PUBLIC AFFAIRS MATTERS RELATING TO OUR FINANCIAL SERVICES SECTOR
Good morning everyone.
I want to speak this morning about some key developments in international public affairs matters relating to our financial services sector. We have been holding regular briefings with industry on these, but it will be good for the general public to be up to speed as well.
First of all, as you may have noted from reports in the local media, last week I led a delegation to Washington, D.C. Our objectives were two-fold: to brief new members of key House and Senate committees about the quality of Cayman's regulatory and international cooperation regimes, with specific reference to our longstanding and effective arrangements with the United States, and to glean any available intelligence on the US position in relation to the April G20 Summit.
My colleagues and I covered, between us, 30 meetings over two days. The people we met were receptive to what we had to say and appeared to have no particular 'anti-Cayman' - or even 'anti- offshore' - agenda. That is not to say that there are not those members of Congress who do, but they do not appear to reflect the majority sentiment. What came through most forcefully was that the policy environment in Washington is very fluid at the moment, and most of people's energies and attentions are, understandably, taken up with the US economy, budget and financial system.
So this visit - together with the advance work leading up to it - has enabled us to get in before agendas are set, to inform key decision-makers about the Cayman Islands and our financial services sector. We will need to keep doing this. I can tell you that in the first quarter of this year so far, we have reached out to political and technical counterparts in the U.S., U.K. and E.U., as well as media (as evidenced by this week's article in the Financial Times quoting the Deputy Financial Secretary) and interest groups to convey Cayman's position and inject factual information into the arena.
As the public may also be aware, there is a lot of 'sound and fury' emanating mainly from the EU, concerning offshore centres, in the run-up to the G20 Summit in London in April. Initially billed as a summit on 'jobs, growth and stability', the G20 Summit agenda quite suddenly acquired an objective of producing a 'blacklist' of 'uncooperative tax havens.' This to us smacks of the intellectually destitute and desperate, but perhaps that is uncharitable. What is clear is that we must intensify our efforts to be properly identified and treated. That means achieving recognition that -
- We are positive contributors. As facilitators of global investment flows, centres such as the Cayman Islands have a real contribution to make to the global objectives of 'jobs, growth and stability'.
- We are regulated. We apply international standards, and in some cases have exceeded them. If, as it appears, those standards are lacking, we are ready, willing and able to move to any new standards developed. But failures in the standards themselves, or in their lax application in onshore centres (as extensively detailed in technical reports of the OECD, IMF, Financial Stability Forum and others), cannot fairly be attributed to us.
- We are cooperative. We have strong, effective channels for international cooperation in regulatory, law enforcement and taxation matters.
- We are transparent. Appropriate client privacy is respected, but we do not trade on 'secrecy' and we provide no safe harbour for illicit activity, including tax evasion.
We are seeking briefings prior to the G20 summit with No.10 and No.11 Downing Street so that we can communicate our position directly.
There is one thing at least that I agree with Prime Minister Brown on, in his conceptions around the G20 summit. That is that protectionism is a malign influence. This is no less true if it should happen to manifest as a 'blacklist' that would indiscriminately shut legitimate players like ourselves out of the global trade in financial services. We trust that the Prime Minister will reflect on this and on the Hippocratic injunction to physicians: "First, do no harm"
We do hope that, dare I say 'sanity' will prevail, and it is by no means clear what will ultimately transpire, but we are not relying on hope alone. We have an unswerving goal to do our utmost to protect the interests of the Cayman Islands.
I would like to conclude by letting the public know, in case the general release on this yesterday has been missed, that we have just concluded for political ratification, with full support from industry, a series of commercial and tax information agreements with the 7 Nordic Group countries. More such arrangements will follow, including one with the UK, as negotiations and discussions mature. This is consistent with the policy approach Cayman adopted in 2000 and reflected in our 2001 Tax Information Agreement with the US. The tradition and track record we have of incorporating due process, intolerance of 'fishing expeditions' and other standard and recognized safeguards together with effective international cooperation are also integral to our tax cooperation arrangements.