British overseas territories pushed to do more on tax transparency

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Overseas Territories Joint Ministerial Council meeting in London, 28 November 2017. Photo: FCO

LONDON, England (CNS) — Prime Minister Theresa May welcomed the leaders of the British Overseas Territories to Downing Street on Monday, after they arrived in London for the annual Joint Ministerial Council meeting this week. While May had good news for some territories, as her government has confirmed a new £70 million package of recovery and reconstruction support for the islands hit by the severe hurricanes this season, there was less good news for territories like the Cayman Islands that are dependent on the financial services sector. With the EU blacklist announcement just over a week away, May indicated that more needs to be done on transparency.

Following the ramped up focus on offshore finance, taxation and transparency since the Paradise Papers leak, May recognised that much work had been done following the Panama Papers leak last year, as she thanked the territories 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 group of a dozen British members of Parliament from various parties recently wrote to the prime minister asking that she set a deadline for the offshore sectors under British control to publish their beneficial owner registers. Although May has expressed her wish for more transparency, she has not endorsed the request for public registers, which was championed by her predecessor, David Cameron. The PM is also believed to be fighting in the BOTs’ corner over their potential blacklisting in Europe.

During the meeting with May, Cayman Islands Premier Alden McLaughlin stated his appreciation for the work being done by the British government regarding this list and stressed the importance that such help to the territories to continue.

“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 OECD. This is not something larger countries can say.”

Cayman Islands Financial Services Minister Tara Rivers also met with Labour MP, Dame Margaret Hodge, 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”.

During the recent budget debate in the UK she said the British government should outlaw the secrecy that leads to such massive tax injustices.

“The Paradise Papers showed us that the problems created by secrecy are much bigger and more complex than we ever thought possible. That’s why we need to legislate for transparency in our tax havens,” she told MPs.

Rivers reportedly discussed her 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.

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.”

London officials indicated that May also updated the BOT leaders on the Brexit talks and asked them to make their views known so they could be properly reflected in the negotiations.

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