Premier’s Summit jab shifts corruption debate

While UK Prime Minister David Cameron’s Anti-Corruption Summit may have ended without a unanimous commitment to automatic sharing of beneficial ownership information it did unmask the glaring disparity in the debate on global corruption as it relates to big countries versus small countries.

This point was highlight by the clear absence of the United States, represented by Secretary of State John Kerry at the summit held Thursday (12 May), on the list of countries that gave their commitment to the initiative to automatically exchange information on beneficial ownership.

The 40 country strong list, which was released by the UK Cabinet office on Friday (13 May) morning, indicated that “the next stage will be for the development of a global standard for this exchange.”

Among those committing to working on the initiative are the Cayman Islands, Bermuda, Isle of Man, Jersey, Luxembourg and Sweden. The initiative, which is yet to be formalised, is being driven by the UK.

Premier McLaughlin, who spoke before the international panel at the summit last Thursday, pointed to the disparity and the double standards being used on the global stage as Cayman and British Virgin Islands are being pounded on transparency yet larger nations carry on uninhibited.

“It is time to put behind us the shades of hypocrisy, which are part and parcel, and have been part and parcel of the global discussion of this issue for years and years. Those countries with real political clout on the world stage continue to focus only on jurisdictions that are only smaller in size, while ignoring obvious jurisdictions that ought to be part of the conversation, the result will be continued failure,” Mr McLaughlin declared at the summit.

Mr McLaughlin, speaking with The Cayman Reporter briefly before departing from London to return to Cayman Friday (13 May) morning, said, he welcomed the feedback he has been receiving for his stance at the summit.

He said it was not only to the benefit of this country, but a point that impacts fellow Overseas Territories (OT) and Crown Dependencies (CD).

“I think we have finally, collectively, I don’t mean only Cayman, the OTs and CDs. I think we have finally turned the corner or finally started to turn the corner with respect to the dialogue on this issue of global corruption and the focus is now starting to be on some of the major metropolitan countries like the US who continue to have the most secretive jurisdictions in the world with respect to financial services company registers, those sorts of matters. Because for decades the focus has always been on us,” Mr McLaughlin said.

Last Thursday Allan Bell, chief minister of the Isle of Man, also shared the Premier’s position as he contended at the summit that “there wouldn’t be real progress unless the United States made its own tax havens, such as Delaware, more open.”

News articles coming out of the summit also reflected on issues pointed out by Premier McLaughlin who said Cayman’s “credentials in the fight against corruption cannot be seriously challenged” and gave this country a place at the table in the development of any new global standard.

From the Financial Times to the Voice of America fingers were pointed at larger countries for their seemingly blind eye approach to corruption as it relates to big countries.

Luis Ramirez, in his VOA article entitled “US, Britain share blame for ‘Pandemic’ corruption at London Summit” pointed out that “The London summit shifted the focus on global corruption, turning the spotlight of blame away from African generals, oligarchs and corrupt dictators and toward the rich countries, whose banks and real estate brokers have been the benefactors of the stolen wealth of nations.”

This point was conceded by Prime Minister Cameron and acknowledged the communiqué coming out of the summit.

While most countries pledged and signed on to the communiqué, Cayman did not.

Premier McLaughlin declined to sign as the communiqué commits signatories to automatic sharing of beneficial ownership information in the absence of a global standard.

Mr McLaughlin’s position on the matter heading into the summit was that Cayman will not agree to the implementing the new initiative until it becomes a global standard.

He maintained this position through his decision not to sign the 34 item communiqué which committed that signatory countries “will work towards ensuring the effective exchange of beneficial ownership information, in line with applicable data protection laws and rules, both domestically and internationally, and between authorities, including tax authorities, asset recovery offices, financial intelligence units (FIUs), law enforcement and anti-corruption agencies; and we note the recently announced initiative, joined by 40 jurisdictions, for the automatic exchange of beneficial ownership information of companies, trusts, foundations, shell companies and other relevant entities and legal arrangements.”

The communiqué also indicated that the countries ask Financial Action Task Force, the Organisation for Economic Co-operation and Development (OECD) and the Global Forum on Transparency and Exchange of Information for Tax Purposes to develop initial proposals on ways to improve the implementation of the international standards on transparency, “including on the availability of beneficial ownership information and its international exchange. This will help tax and law enforcement authorities track the complex offshore trails used by criminals.”

The UK Guardian reported that Cayman, together with the Isle of Man, was among a group of eleven countries that “will join the now 29-strong group where lists of beneficial owners are drawn up and shared between governments, although not publicly. Those countries include Cayman Islands, Jersey, Bermuda, the Isle of Man and the UAE.”

The Premier, in his remarks at the summit, pointed to this country’s participation in the multi-lateral convention which allows tax exchange with over 90 countries and automatic exchange of information via the EU savings directive, US FATCA and UK FATCA and its subscription to the OECD Common Reporting Standards as evidence of its willingness to engage and to participate.

“We have pursued and have met the standards of the OECD Anti-Bribery convention extended to us in 2010 and we have requested repeatedly the extension to the Cayman Islands of the UN convention against corruption. We have been assessed and our standards found to be more than adequate in that regard,” the Premier added in his statement at the summit.


via The Cayman Reporter

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