Just a few weeks after the UK left the
European Union they place us (a British Protectorate) on their list
of non-cooperative jurisdictions regarding tax issues.

We missed passing a crucial piece of
legislation before a key deadline by a matter of days.

Premier Alden McLaughlin said he was
“deeply disappointed”.

So, why did it happen? Why wasn't it
passed in time?

Our premier seems to believe he had
done everything he needed to co-operate with the EU to deliver on our
commitments to enhance tax good governance. He said that since 2018,
Cayman has adopted more than 15 legislative changes in line with the
EU’s criteria, and in April 2019 the EU confirmed that Cayman had
satisfied its economic substance requirements, with the exception of
economic substance for funds.

However, although Cayman passed the
laws required they didn't come into force here until February 7th.
This was a week after the EU deadline and after the meeting when the
EU made their decisions – we did not cross the post in time.

Even though McLaughlin said he had told
the EU Finance Ministers the necessary laws were passed they took no
notice what he had said.

And he seems surprised.

He said, “While Cayman consulted with
a number of stakeholders on our legislation, including our financial
services industry, the principal components of our new and revised
laws were shaped by the EU’s criteria,”

“The Cayman Islands also 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,” he added.

“As soon as possible”. Hmmm.

German politician Markus Ferber, of the
Christian Democrat EPP group, said this should serve as a warning to
Britain as it tries to position itself in the global economy as a
country outside the EU.

“The UK would be well advised to take
note that EU Finance Ministers put a British Overseas Territory on
the blacklist of tax havens. This sends a clear signal that the idea
of turning the UK into a tax haven will not be acceptable to the EU,”
he said. “There are reputational consequences because being
blacklisted by the EU clearly is a signal about the problems in tax
governance.”

That would appear we are being
punished.

Mainly, though, the blame must lie with
ourselves.