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Fact-Finding British MP's Back Cayman Regulations

Royal Gazette

04 September 2000

This story is reproduced by kind permission of the Royal Gazette at http://www.accessbda.bm

British Members of Parliament ended a fact-finding mission in the Cayman Islands with praise for financial regulation in the British territory, whose offshore banking industry has come under international pressure.

Labour MP Fraser Kemp said the bipartisan delegation had "delved into (financial regulation) and clearly the regulatory regime is a lot tougher than the outside world perceives it to be."

The delegates, guests of the Cayman Parliamentary Association, ended their five-day visit late on Tuesday.

John McFall, Labour MP from Dumbarton and leader of the six-man delegation, said the group heard a number of concerns from executive and legislative officials regarding the 1999 white paper "partnership for progress" for British overseas territories.

The policy statement, which also dealt with citizenship issues, constitutional modernisation, environmental protection and human rights, called for tightening of financial regulations in Britain's territories.

McFall said that among the biggest concerns raised during the visit was the fear that Britain could unilaterally remove Cayman banking secrecy laws that have helped make the western Caribbean territory the world's fifth-largest banking centre.

The Caymans, with 50,000 people, have 572 registered banks and trust companies with more than $490 billion on deposit. Most of the work force is employed in either the financial or tourism industries.

Recent international criticism has put the Cayman financial community on the defensive. In June, the Financial Action Task Force, a Group of Seven watchdog, put the Caymans on a blacklist of jurisdictions it said lacked adequate controls to deal with criminal money laundering.

The Caymans avoided inclusion on an Organisation for Economic Cooperation and Development (OECD) blacklist of tax havens in July by pledging to meet OECD standards in three to five years.

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