Prime minister Theresa May this week pushed representatives of British Overseas Territories (BOTs) to redouble their efforts to do more on tax transparency ahead of an expected announcement on a proposed EU blacklist of tax havens next week.
While May announced support for some territories by announcing that her government had agreed a new £70m package of “recovery and reconstruction support” for Caribbean islands hit by the severe hurricanes this season, there was less good news, said the Cayman News Service (CNS), for territories like the Cayman Islands, which are dependent on the financial services sector.
In the face of renewed focus on “offshore finance, taxation and transparency” brought about as a result of the data breach at the Bermuda outpost of the Appleby law firm, dubbed the Paradise Papers, May said that she accepted that much work had been done following the Panama Papers leak last year.
She thanked the territories, noted the news service, for “the leadership they have shown and steps taken to implement international standards”.
But according to a release from her office, she asked for similar leadership to show what more can be done to make further progress on the issue.
A number of cross-party MPs recently wrote to the prime minister to demand that a deadline be set for offshore jurisdictions to publish their beneficial owner registers.
Despite apparently supporting moves towards greater transparency, May has not backed the call for public registers, a move publicly endorsed by her predecessor, David Cameron.
CNS stated that Cayman Islands Premier Alden McLaughlin stated his appreciation during the meeting with May for the work being done to support the BOTs by the British government regarding the proposed EU blacklist.
Support for BOTs from UK government vital
McLaughlin, said CNS, stressed the importance of such help to the territories continuing.
“I pointed out to the prime minister that, given all that the Cayman Islands has done over the decades around transparency and in the fight against financial crime, including tax evasion, that we do not belong on any list of non-cooperative countries,” he said in a release from his office. “In fact, Cayman has not only cooperated but the work we have done has been recognised by entities such as the [Organisation for Economic Cooperation and Development] OECD. This is not something larger countries can say.”
Financial services minister Tara Rivers also met with Dame Margaret Hodge (Labour-Barking), pictured above, who has been a vocal critic of offshore financial centres. Hodge has called on the UK Treasury to compel the overseas territories and crown dependencies to publish public registers showing “who owns what and where”.
“The Paradise Papers showed us that the problems created by secrecy are much bigger and more complex than we ever thought possible,” said Hodge in a recent parliamentary debate. “That’s why we need to legislate for transparency in our tax havens.”
CNS said that Rivers reportedly addressed Hodge’s concerns and sought to “assist her in better understanding the work done in Cayman and to show that not only does the Cayman Islands cooperate in regard to tax matters, but that the country provides a benefit to the UK”, according to a release quoted by CNS.
Rivers said,“I enjoyed meeting Dame Hodge; and although we expressed our differences of opinion with regards to the financial services business conducted in Cayman, I took the opportunity to strongly present our case based on facts, and I appreciated her willingness to listen.”