Editorial
Presumed Innocent
Bank secrecy laws came of age during AdolphHitler's assault on Jews. You see, it wasn't enough for him tomurder Jews and attempt to wipe their culture off the face ofthe earth; he wanted to steal their money too.
Enter bank secrecy laws. In order that theirassets be protected, Switzerland opened its banking doors andsaid: "come here, we will give you numbered bank accountsand make it illegal for any bank employee to divulge informationabout you."
In those days, the Jews had no choice but to walk in with suitcasesfull of cash for deposit. Imagine the risk! Secrecy laws, therefore,were not created in attempt to coddle criminals; rather they werecreated to thwart the heinous crimes of Hitler and his Nazi regime.
Time changes, however, as do Internationallaws and the intent of some depositors. To say that launderingcash does not exist would be ludicrous. We in the Cayman Islandsall know better and we also know that some shady dealings havecome to pass through Cayman banks.
We have cleaned up our act, however. Somuch that many other jurisdictions, in an obvious attempt to attractthe 'good guys' money, have been known to try and mirror our lawsand regulations in respect of banking. As a matter of fact, itis known that the Cayman Financial Center model has won praiseand respect from many international bodies, including other Governments.
These days, there has been much pressureto cooperate with foreign authorities and Cayman is determinedto be a good global citizen. However, as the recent ruling bythe Chief Justice Anthony Smellie in connection with the recenttest of our system to protect those who trust our system bearout, we will not do so at the risk of selling our own countryand financial system down the drain.
Nay Sayers who believe otherwise, shouldtake note.Here's the background.
Ansbacher (Cayman) Limited is a Banking and Trust Company andincorporated in and licensed to do banking business in and fromthe Cayman Islands. It was made the subject of an order of theIrish High Court appointing inspectors to investigate and reportupon the business it allegedly conducted in that Country.
There had to be enough evidence to suggestthat the company's affairs are or were conducted with the intentto defraud. Ansbacher does not accept the Irish high court hadthe jurisdiction to order an inspection of its records. Why? Because Ansbacher asserts that it never carried on business inIreland.
But, Ansbacher deemed that it was in itsown interest to cooperate by disclosing certain confidential informationheld in respect of its Irish resident clients. This of course,flew in the face of Cayman confidentiality laws. So naturallythere were writs filed in an attempt to make them do so. Ansbacheralso wished to be released from any liability resulting from itsdisclosures, if it was so compelled to by the Cayman Court.
Presumed innocent is the underlying philosophyby which Chief Justice Anthony Smellie Q.C. concluded in thismatter. At the same time, he also found a way to cooperate withthe Irish Court inquiry.
In short, Ansbacher has been ordered to"divulge to the inspectors for the purposes only of theirinquiry . . . provided that before doing so, in keeping with section4 (4) (iii) of the CR(P)L; references to the names, addressesand any other descriptions or other reference which may disclosethe identities of the clients are deleted and substituted by alphabeticalletters, numbers or symbols . . ."
In this way, inspectors can search throughthe records to see if any illegal dealings had taken place. Whathappens if they find illegal dealings is a matter that could bedealt with in subsequent court proceedings.
The bottom line is -- privacy in bankinglives on in Cayman. At the same time we have shown due diligenceby extending the hand of cooperation to foreign governments, withoutcompromising the good order we have put in place, which has propelledthe Cayman Islands to become the fifth largest financial centerin the world.
It is, therefore safe to say, the Ansbacher ruling is a win-winsituation.