Cayman's premier seeks help in London to tackle EU's blacklist

Pedro Gonçalves
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Cayman's premier seeks help in London to tackle EU's blacklist

Cayman's premier Alden McLaughlin is in London for a series of high-level meetings where he is expected to address the recent blacklisting of the jurisdiction by the European Union.

Meetings include a first visit with Baroness Sugg, the new UK overseas territories minister, as well as the prince of Wales and prime minister Boris Johnson's chief of staff, among others. 

"These meetings are important because Cayman continues to stand strong in the world and we need to continue to champion good relations with the UK," said McLaughlin.

Crucially, this is a technical issue, and this does not reflect any concerns regarding the steps Cayman has taken to address the EU’s other concerns around fair taxation or transparency"

"I am also looking forward to meeting Baroness Sugg to ensure we have a close working relationship and continued cooperation with the United Kingdom. Too, I believe it is important that the Cayman Islands and the UK work more closely on trade issues."

Cayman was one of four new jurisdictions added to the EU blacklist, along with Panama, the Seychelles and Palau. They join eight jurisdictions that have been on the list for several years: Fiji, Oman, Samoa, Trinidad and Tobago, Vanuatu, Samoa, Guam and the US Virgin Islands.

The Cayman Islands government has already contacted EU officials to begin the process of being removed from the list as soon as possible, which is understood to be October this year.

McLaughlin noted that over the past two years the Cayman government has cooperated with the EU to deliver on its commitments to enhance tax good governance. Since 2018 the island has adopted more than 15 legislative changes in line with the EU's criteria, he said. 

"Crucially, this is a technical issue, and this does not reflect any concerns regarding the steps Cayman has taken to address the EU's other concerns around fair taxation or transparency," said Harneys, the law firm. 

Harneys stressed the EU is not imposing any direct penalties on Cayman or Cayman structures. The decision is limited in scope to EU member states and not any other jurisdiction.

The EU stated that the Cayman Islands was listed because investment funds based here do not reflect real economic activity on the archipelago. "That could lead to investment vehicles being created solely to reduce taxes in other jurisdictions," officials stated.

German politician Markus Ferber, of the Christian Democrat EPP group, said this should serve as a warning to Britain as it tries to position itself in the global economy as a country outside the EU.

"The UK would be well advised to take note that EU Finance Ministers put a British Overseas Territory on the blacklist of tax havens. This sends a clear signal that the idea of turning the UK into a tax haven will not be acceptable to the EU," he said.

Cayman is the only British Overseas Territory to have been blacklisted, which coincidentally happened after Brexit.

 

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