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Breakfast remarks

Published 22nd January 2019, 11:58am

Good morning, I will lie and say that it is great to be in New York City this time of year… but I will also go on to be truthful and say that the cold weather notwithstanding it is indeed good to be with you at this Cayman Finance New York Breakfast Seminar as we embark on another New Year filled with exciting possibilities. Whilst 2019 certainly offers opportunities it has begun with challenges, much of which are political in nature. Here in the USA the Government shutdown comes to mind while in the UK Brexit is looming with no agreed plan. In the Cayman Islands a key issue for us is the European Union Listing process and the focus on financial services jurisdictions demonstrating that there is substantial economic substance behind the business done there. We are up to the challenge. Many of you who have done business through the Cayman Islands for many years know that we have grown from strength to strength despite the challenges posed by moving goal posts and evolving standards. The great statesman and UK Prime Minister, Winston Churchill, is reported to have said that “a pessimist sees the difficulty in every opportunity whilst an optimist sees the opportunity in every difficulty”. Seizing the opportunity inherent in difficulties has seen the Cayman Islands transform itself over the course of the past 50 years into a premier international financial centre, and in the process helped transform the way that legitimate business is done globally. We have shown that we are ready and willing to not only fight to keep the thriving business and economy that we enjoy now, but to also adapt to new emerging trends, keenly conscious that many of these trends are driven by geopolitical considerations. Some Governments, particularly in Europe, have a difficult time understanding how a country like mine can be so successful without a regime of direct taxation. They see a country with very low unemployment, good budget surpluses, low public debt, modern infrastructure, a Moody’s Investment Credit Rating of Aa3 and a steadily growing economy. They see all this and no direct tax and conclude that something must be wrong - for the concept of no direct taxation is antithetical to their belief system. They mulishly ignore the reality that our financial services business regime is attractive to companies because of our proximity to the United States, our tax neutrality, a broad cadre of financial services expertise, and because of our adherence to international standards with respect to global transparency and the fight against money-laundering and cross border financial crime. While businesses domiciled in the Cayman Islands do not pay direct taxes to our jurisdiction, our laws and regulations ensure that the taxes owed to those home jurisdictions are paid. As the international standards continue to evolve, we are committed to adhering to them, providing they represent a truly a global standard. And so just last month my Government, in consultation with the financial services industry, spearheaded new economic substance rules and legislation in our efforts to meet the requirements of the European Union and the OECD. And we spent the last week in London, Brussels, Berlin and Paris where we had 13 meetings with representatives of the EU, including the Commission and the Code of Conduct Group, and with representatives of various EU member states, including Germany and France. We wanted to ensure that the EU Commission and member states understand that Cayman is meeting the commitments we made and to provide opportunities for them to raise any remaining concerns. Conversations were professional and frank, and mostly positive. While the European Union has not yet determined what jurisdictions will be placed on a final list of non-compliant tax jurisdictions, we remain positive that, given all that we have done, if the process is fair the Cayman Islands will not be on any such list. While we are doing all that we can to comply with global regulation and to remain the jurisdiction of choice for financial services, we also certainly see opportunities for us in the UK’s Global Britain initiative. We are therefore establishing a new Ministry of International Trade and Investment to better coordinate our work in promoting the Cayman Islands overseas, and with the assistance of the United Kingdom we have begun the process to establish our own Asia Office, based in Hong Kong. We are positioning our Islands to take the best advantage of whatever new relationship eventually emerges between the UK and the EU. So, in short, my message is that despite challenges the Cayman Islands remains bullish about the prospects of financial services business in the jurisdiction and are gearing up for opportunities that the uncertainties of the future will present. If you are already doing business with us in the Cayman Islands, I thank you for your support and confidence in us. If you aren’t already operating from our shores, I invite you to come to Cayman and explore the awesome possibilities that await you. Thank you for your kind attention this morning and again, I am pleased to be here with you in this fabulous city.