UK Could Order Cayman To Accept EU Savings Tax Directive, Experts Warn

by Amanda Banks, Tax-News.com, London

20 November 2002

Despite the strong stance recently taken on the European Union's Savings Tax Directive by Caymanian Leader of Government Business, the Hon McKeeva Bush, legal experts have suggested that the United Kingdom could force the jurisdiction to accept the information exchange provisions contained within the directive, via an Order in Council.

Speaking following a meeting with other British Overseas Territories leaders late last week, Mr Bush announced that the Cayman Islands would be standing firm in opposition of the proposals, arguing that: 'The interests of the UK's Eurobond market are of importance to the United Kingdom but no more so than our financial services industry is to us. We have fully considered our options and those of the EU and are confident that our position is correct both morally and legally.'

However, speaking to the Cayman Net News service this week, an unnamed expert warned that the UK government could order the Caymanian authorities to accept the same legal position as the United Kingdom on this issue, as it has done in the past over capital punishment and the legalisation of homosexuality.

Speaking about the possibility of an Order in Council being enforced, the Cayman Net News' source admitted that: 'This is certainly an option open to Britain if they want the Cayman Islands to come on board,' continuing:

'Here are people saying we have autonomy, but then the autonomy is not really worth very much. You can't really have autonomy if at the end of the day, the colonial power can change your laws whenever they feel like it ... they (the UK) are always talking about partnerships for progress and all that, but an Order in Council flies in the face of autonomy.'

A comprehensive report on various international initiatives, including the EU's Savings Tax Directive is available in the Tax News Reports Shop at http://www.tax-news.com/reportshop/

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