A leading firm of corporate lawyers in the Cayman Islands has been putting into context for their clients (and the public by extension), the decision by the European Union to blacklist the British territory.
Conyers, which provides services to international clients from offices in Cayman, Bermuda and the British Virgin Islands, explained that “it appears that the listing is due to a technical breach relating to the regulation of collective investment vehicles (CIVs).”
The EU announced a few days ago that it had placed the Cayman Islands on its tax blacklist.
The news has been picked up by the international media given the status of the British territory as a leading global financial centre.
According to the EU, the inclusion of Cayman on its infamous ‘blacklist’ of what it terms ‘non-cooperative jurisdictions’ was that the territory had not implemented ‘appropriate measures’ within a set deadline to prevent tax abuse.
Chairman and director of Conyers, Christian R. Luthi, and Partner and Head of the Cayman office, Kevin C Butler, assure their clients that while they "will naturally wish to understand the potential implications", there are in fact no targeted or direct sanctions as a consequence of Cayman Islands being blacklisted by the EU.
“Our assessment indicates that the jurisdiction’s inclusion on the list has limited potential impacts at this time,” the Conyers officials say in the statement.
The EU had previously placed the Cayman Islands on a ''grey list'' with a time-frame to put measures in place to address the issues of concern.
It would appear that the dispute between the Cayman Islands and the EU revolves mainly around that time-frame to enact specific legislation.
The Conyers statement notes that: “The Cayman Islands Government has stated that the EU’s concerns over CIVs were addressed by the passing of The Private Funds Law and The Mutual Funds (Amendment) Law on 31 January 2020, of which the EU was duly notified.
“Both laws were enacted on 7 February 2020. However, the EU’s Code of Conduct Group met on 4 February to advise the EU Finance Ministers on preparation of the list. According to the EU, the jurisdiction ‘did not deliver on their commitment on time’."
The Cayman Islands Government has stated that it has “already contacted EU officials to begin the process of being removed from the EU list of non-cooperative jurisdictions as soon as possible, which is understood to be October this year”.
Conyers quotes the government as affirming that over the past two years it has cooperated with the EU to deliver on its commitments to enhance good tax governance and has adopted more than 15 legislative changes in line with the EU’s criteria.
Premier Alden McLaughlin has said the jurisdiction “remains fully committed to cooperating with the EU, and will continue to constructively engage with them with the view to be de-listed as soon as possible.”
In its statement, Conyers say they “will continue to monitor the position closely and will assist you to manage and respond to the situation as necessary.”