EU REMOVES CAYMAN FROM ‘BLACKLIST’

By Staff Writer

The Cayman Islands has been taken off the European Union’s ‘blacklist’ of countries it describes as non-cooperative jurisdictions for tax purposes.

The decision has been welcomed by the Cayman Islands Government (CIG), the British government and Cayman’s offshore financial services sector.

Cayman was included on the list in February for what the EU claimed was the jurisdiction being non- or partly compliant with international standards.

Hon. Premier Alden McLaughlin said the February 2020 listing was in relation to investment funds supervision.

“Cayman responded positively by expanded the scope of our funds regime to ensure that the Cayman Islands Monetary Authority, our financial services regulator, has the legal mandate to supervise all Cayman-based investment funds,” he said.

Premier McLaughlin reaffirmed that Cayman remains fully committed to international tax good governance standards, and noted that the EU has joined the OECD in positively recognising Cayman’s tax regime.

In July 2019, the OECD’s Forum on Harmful Tax Practices assessed Cayman’s regime as “not harmful,” the highest ranking possible.

“We will continue collaborating with the EU, including through broadening our dialogue to topics of mutual interest,” Premier McLaughlin said. “These include green financing and key topics outside of financial services, such as environmental matters and tourism.”

GOVERNOR AND UK PLEASED

Calling Tuesday’s announcement by the EU “a significant achievement”, HE Governor Martyn Roper said: “Despite dealing with the global pandemic, Cayman has yet again shown a strong track record in fully adhering to international standards. This supports the sector’s strong international reputation as a world-leading, highly professional and high-quality financial services sector.”

Mr Roper pointed out that there was cooperation from a wide range of industry stakeholders who demonstrated a shared objective and collective resolve to support the jurisdiction’s removal from the list.

He said Cayman engaged constructively and transparently with the European Commission.

“That included making additional changes to the law, in agreement with the Commission, to ensure it covered all the funds expected to be in scope. This approach had a big impact on the successful conclusion of the negotiations.”

The Governor further stated that the UK, via the Foreign, Commonwealth and Development Office (FCDO), HM Treasury and his office have supported the Cayman Islands Government throughout this process.

Meanwhile, Baroness Sugg, Minister for the Overseas Territories at the Foreign, Commonwealth and Development Office, who has been supportive of the Cayman Islands Government throughout said: "The decision made at the EU Economic and Financial Affairs Council meeting is a credit to the efforts of the Cayman Islands Government.

"The removal of the Cayman Islands from the EU’s list of non-cooperative tax jurisdictions demonstrates the Government’s commitment to meeting the highest international standards," she said in a statement.

The Cayman Islands governments has said it is committed to the goals of the EU and the OECD on their goals of improving governance of the sector both in Cayman and globally.

It has enacted a series of laws to bolster its world-renowned offshore financial services sector and meet the stringent requirements of the EU and the OECD.

INTERNATIONAL REACTION

The removal of Cayman from the list has garnered considerable international attention with some industry experts questioning why it was included in the first place.

The development has also been welcomed by the global hedge fund industry.

Cayman is regarded as the industry's leading offshore jurisdiction.

Last year, the number of funds licensed by the Cayman Island Monetary Authority stood at more than 10,000.

The news of Cayman being removed from the EU’s blacklist comes on the day that the European Council updated the EU’s list of non-compliant jurisdictions for tax purposes.

While Cayman and Oman were removed, Anguilla and Barbados were added.

The countries in the updated ’blacklist’ are American Samoa, Anguilla, Barbados, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu.