UK government backs OTs over Foreign Affairs Committee

By Michael Jarvis,
UK Correspondent

The British government has rejected the key recommendations in the recent report by the UK parliament’s Foreign Affairs Committee(FAC) on future relations with the Overseas Territories (OTS).

The controversial issues of beneficial ownership, same-sex marriage and voting rights which underpinned the FAC’s report, had caused an outcry in the OTs.

Cayman Islands Premier Hon. Alden McLaughlin had heavily criticized the Committee’s report when it was published in February, describing it as a “shameless and shameful attempt to reproduce neo-colonialism.”

But now, the formal response from the British government to the report assures that it will not adopt those specific contentious recommendations put forward by the FAC.

Premier McLaughlin has welcomed this as “ a clear-headed restatement of the fundamental principle of self-government that underpins the relationship between Cayman and the UK.

On the issue of registers of beneficial ownership, the UK Government response reaffirms the existing understanding of the consultative process to be followed, according to a statement from the Premier's office.

In its report, the FAC stated: “We profoundly regret, however, that public registers may not be published before 2023. It is simply not acceptable that this will be long after the deadline set out in the Act.”

Regarding same-sex marriage, the British government, while saying it notes the on-going legal action in Cayman, however makes clear that the issue “should be one for the territories to decide and legislate on”.

It stresses that “we have no plans to introduce an Order-in-Council on this issue.”

That was one of the demands of the FAC which had insisted that “The (British) Government should set a date by which it expects all OTs to have legalised same-sex marriage. If that deadline is not met, the Government should intervene through legislation or an Order in Council.”

The equally controversial recommendation of voting rights is similarly dismissed.

The UK government asserts that “immigration decisions are primarily a matter for OT governments” and makes clear that there is no intention to interfere with locally-determined franchise and representational arrangements.

It was the FAC’s position that “the UK Government should initiate a consultation with the elected governments of the OTs and work with them to agree a plan to ensure that there is a pathway for all resident UK and British Overseas Territory citizens to be able to vote and hold elected office in territory.”

In a statement on the position taken by Whitehall in rejecting these key recommendations from the FAC, Premier McLaughlin said: “In the 21st Century, there can be no justification for people 5,000 miles away, most of whom have never even visited these Islands, thinking they know better than we do how we should run our own affairs.”

He welcomes the fact that “the UK Government’s response thoroughly rejects that idea and I am sure it will be welcomed across the Overseas Territories.”

“I said when the Committee’s report was released that these were only recommendations and that we needed to wait for the UK Government’s official response,” Mr. McLaughlin said, adding that, “I am very pleased that the UK has clearly listened to the representations that I and other OT leaders have made.”

While the matters of same-sex marriage and voting rights are being left up to the Overseas Territories to decide, the issue of public disclosure of the registry of beneficial ownership remains unresolved.

Under the heading of the Sanctions and Anti-Money Laundering Bill 2018, it’s aimed at forcing the Overseas Territories, especially those with offshore financial centres, to impose public registers of beneficial owenership.

If they didn’t have the legislation in place by the end of this year, the original plan was to have it imposed by imperial decree from London.

The rationale is to combat tax evasion and money laundering and align UK and OTs policies on this.

But the legislation was resisted within some sections of the British government and parliament with the same intensity as the opposition to it from the OTs.

The Foreign and Commonwealth Office (FCO) went as far as cautioning that that imposing direct legislation on the territories could undermine their respective authorities.

Earlier this year, the British government agreed to defer the mandatory 2020 implementation deadline with a three-year extension to 2023 while consultations continue.

The registers are seen as one of the main tools to tackle tax avoidance in the BOTs.

Addressing that specific issue, Premier McLaughlin says: "While we in the Cayman Islands and others in the OTs will continue to resist the UK’s attempts to impose public registers upon us in the absence of a global standard, it is positive that the UK Government has pushed back on any suggestion that the current timetable should be accelerated.

“I would like to thank the Governor for the assistance he has provided in representing the views of Cayman back to the UK Government and to ensure that those making the decisions were aware of the grave concern we felt about the Committee’s recommendations.”

Premier McLaughlin also emphasised that “The UK Government’s response underlines their commitment to developing a positive and constructive relationship with the OTs.”

He also said "that commitment has been seen too in the recent talks over the potential Constitutional changes that we would like to put in place in order to clarify our relationship. Those negotiations are nearing a conclusion and I hope to be able to report back to the House and to the country shortly on what has been agreed.”