The Leader of Government Business the Hon. McKeeva Bush has strong words for the UK and the EU as the Cayman Islands continues ...
A Fight For Sovereignty
The Cayman Islands' government continues to stand firm against the United Kingdom (UK ) and the European Union (EU) in an effort to protect its financial services industry and its economy.
The country's position in relation to the UK and the EU was made unequivocally clear by Leader of Government Business the Hon. McKeeva Bush as he delivered two statements in the Legislative Assembly (LA) on Thursday December 19, 2002.
Mr. Bush said that in relation to the EU's Draft Directive on the Taxation of Savings Income, there have been "several developments but little progress".
He revealed that Government wrote the European Commission and reiterated its desire for discussions regarding the Draft Directive on the Taxation of Savings Income.
The Government Leader also told the LA he was informed that at a European Commission meeting of the 11th and 12th of December, the UK's Chancellor of the Exchequer Mr. Gordon Brown indicated that the UK would "ensure" that the Caribbean Overseas Territories would apply the automatic exchange of information.
Mr. Bush also noted press reports which stated that the Chancellor indicated that the UK's dependent territories would implement the Savings directive from 1 January 2004 if the Directive is adopted by the EU.
"The Government has by letter to the
European Commission confirmed that it questions the legitimacy
of efforts to compel the Caribbean Overseas Territories to go
along with the Savings Directive.
By that same letter we have reiterated our desire for discussions
with the European Commission in this regard," Mr. Bush said.
"The United Kingdom's Chancellor of the Exchequer is understandably looking out for his own interests and those of his political constituency in the UK's financial services industry rather than the interests of the Caribbean Overseas Territories. The Caribbean Overseas Territories are left to defend their own interests in this regard."
Mr. Bush said the Caribbean Overseas Territories (COT) have repeatedly indicated to the UK that while they can understand the value of the Savings Directive to the United Kingdom, and they remain willing to discuss matters related to the EU Tax Package, such discussions can only move forward in a direction and in a context which safeguards the interests of the peoples of the Caribbean Overseas Territories.
"There can be no doubt that all EU Member States, including the UK also have obligations, both national and international, to take into consideration the interests of the Caribbean Overseas Territories. Based on those obligations, the Cayman Islands has legitimate concerns which relate to the legality and fairness of the Feira Accord and its practicality," Mr. Bush added.
He said the Cayman Islands has legitimate expectations that any process and outcome adopted by the EU in regard to the Savings Directive will comply with EU and international law.
"Any application of the Savings Directive in the Cayman Islands, but not by our competitors, is very likely to be both disproportionate in its costs to the Cayman Islands and ineffective," he said.
"The United Kingdom has done a regulatory impact assessment in respect of implementation of the Savings Directive in the UK and is well aware that there would be significant costs to both private sector operators and public sectors associated with implementation of the Savings Directive."
He said the same would certainly be true in the Cayman Islands as well. However, Mr. Bush noted, neither the UK nor the EU have been able to provide any information which would indicate that if the Cayman Islands is obliged to adopt the Savings Directive, that any additional tax revenues will be obtained by the EU Member States as a result.
"There is no basis in established fact for the discriminatory inclusion of the Cayman Islands in the Feira Accord which clearly discriminates among overseas countries and territories in that only certain overseas countries and territories are intended to be burdened by the "Savings Directive"," he added.
In relation to the UK, Mr. Bush said that in his meetings with the Foreign and Commonwealth Office (FCO) between December 9 and 11, he made it quite clear that any debate regarding constitutional modernisation for the Cayman Islands must take into account the financial sovereignty of the Cayman Islands, and recognise the fact that these Islands have never been grant aided by the UK.
"I therefore made the request that they include in the draft constitution a clause to the effect that the UK Government should not have control of our financial affairs, through Orders-in-Council that is the Privy Council, or by Legislation in the Commons.
"My statement to the FCO in this regard, requested commitment from Her Majesty's Government on two main points: that the Governor should be required to consult with Executive Council on the exercise of any powers that would affect our financial future in advance, rather than inform them when there are financial implications and that there should be some form of obligation on Her Majesty's Government, not to commit the Cayman Islands on an external affairs matter liable to affect the Islands' economy without prior consultation through the Governor, or an obligation to the Governor to ascertain and advise of impending HMG action."
Mr. Bush said he cannot say that this request will be granted by the UK, however, it is of paramount importance to the financial industry of these islands.