House of Commons: Finance Bill 2016, amendment calling for country by country reporting not passed

The Finance Bill made its way through the House of Commons this week. Notably, Caroline Flint's amendment calling for public country-by-country reporting was rejected, losing out by 22 votes.

On her amendment, Flint raised points on the importance of multinationals corporate reputation through good governance, and the UK's position as a leader and not a follower. She concluded: "Let us ensure that the age of secrecy is gone. Let us force the multinationals into the light."

Financial Secretary to the Treasury David Gauke's responded for the Government, where he pointed out technical flaws to the amendment, largely focusing on the limits to the extent that the Government can require a foreign multinational entity to disclose information on its global activities under UK law.

Gauke stressed that he believes the best way forward is through international efforts on public country-by-country reporting. He recognises the current efforts HMRC are putting into tackling tax evasion and non-compliance and states that the tax gap is at a 'record low'.

His overall concluding remarks were as follows: "In the light of all that, I will say that yes, we want to make progress on public country-by-country reporting, but that needs to be on a multilateral basis. Amendment 1, despite some considerable ingenuity to get it in order to be debated today, does not do what is needed. I therefore urge hon. Members not to support it, in the knowledge that this Government want to make progress on this matter and expect to make considerable progress over the next few months."

Full transcript can be found here via

James Quarmby champions offshore territories in Guernsey

As reported by Guernsey Press, James Quarmby, head of private wealth at Stephenson Harwood has been on the islands supporting the case of the UK's Crown Dependencies and other offshore territories, stating that "big countries are bullying smaller countries because they can. It's a form of imperialism".

Quarmby was in Guernsey addressing members of the Guernsey Association of Trustees and the Guernsey branch of the Society of Trust and Estate Practitioners at an event jointly hosted with Locate Guernsey and sponsored by law firm Mourant Ozannes.

Cayman's 'secrecy law' overhauled to reduced misinterpretation

Cayman News Service have announced the overhauling of the legislation previously considered the 'secrecy law'. Cayman Financial Services Minister, Wayne Paton, has stated the law has been repealed in order to help detract unwanted and unfair criticism.

The Confidential Relationships  (Preseveration)  Law has been replaced by the Confidential Information Disclosure Law. The new law removes the criminal sanction for any breach of confidentiality. Explaining the need for change as a result of significant misinterpretation and unwarranted attention, the minister justified the repeal and said the new law would improve Cayman's reputation.

Cayman government spending ' apparently little left for infrastructure 

The the Cayman Compass have reported on government spending ' reaching nearly $1.2 billion in total public spending slated for the upcoming 18-month budget cycle, distributed throughout well over 100 ministries, portfolios, departments, units, statutory authorities and government-owned companies.
The Cayman Compass argues the inflexibility of these expenses, suggesting a large part of the expenses to be 'locked in' and a lack of finances are then remaining to utilise for large projects such as infrastructure.

British Crown Dependencies and Overseas territories have each released statements indicating their sentiment following the UK's announced departure from the European Union:

- Isle of Man  (23/06/2016)  "Vigilance vital to defend Island's interests following EU exit vote"

Chief Minister Allan Bell MHK says the Island will need to draw on the strength of its external relationships to protect its position in the wake of yesterday's referendum vote for the United Kingdom to leave the European Union.

The outcome means the Isle of Man will have to seek a replacement for its Protocol 3 relationship with the EU, which allows free trade in manufactured goods and agricultural products.
There will be no immediate change, however, as the UK's withdrawal and the negotiation of new relationships with the EU, including the successor to Protocol 3, is expected to take at least two years.

Protocol 3, as an attachment to the UK Treaty of Accession, is dependent on the UK's membership of the EU and will come to an end when it finally leaves.

Mr Bell commented: 'The Brexit vote is the start of a journey into the unknown for both the UK and the Isle of Man, as this situation is without precedent. The potential implications are far reaching and could impact on the structure of the UK itself as well as the future of Europe.

'Fortunately the Island is well prepared for this journey and our reputation and relationships externally are stronger than ever before. We have built up a network of good relations and contacts in London and Brussels, in Scotland, Ireland and Wales, and with our fellow Crown Dependencies of Jersey and Guernsey.

'We will need to draw on the strength of these relationships and work hard to maintain them, while remaining relentlessly vigilant in the defence of our Island's national interests.'
The Chief Minister continued: 'Much will depend on what new economic arrangement the UK can negotiate with the EU, and how the Isle of Man as a Crown Dependency can fit into that framework. We will have to stay very close to the negotiations to ensure that the Island's needs are known and protected.'

The Government has already been active in promoting awareness of the Isle of Man's position, and in gathering information and intelligence both on and off the Island. In April this year the Council of Ministers published its first interim report on the potential consequences of Brexit for the Island, with contributions from across Government.

The second report was issued last week, setting out how a new relationship between the UK and the EU might function, as well as explaining how other small European jurisdictions manage their relationships with the EU.

Mr Bell concluded: 'The UK's decision to leave the European Union is likely to have a serious and long-lasting effect on the economy and politics of both Britain and Europe.

'Although the Isle of Man is not part of the EU, the UK's withdrawal will nevertheless have a significant impact on the Island. We need to work closely with UK politicians and senior officials to ensure that we understand the UK's direction of travel, and that they understand the implications for us. It will be vital that our interests are not overlooked.'

-Jersey (24/06/2016) Chief Minister's statement on EU referendum

The Chief Minister, Senator Ian Gorst, has released the following statement:

"The people of the United Kingdom's vote to end their membership of the European Union is a significant development. There is now likely to be a period of some uncertainty across the UK and Europe, but Jersey is well placed to weather the effects of this change. We are already outside the EU for most purposes, and the relationship that Jersey enjoys with the EU is not going to change overnight. It is expected that there will be a period of up to two years before the UK formally exits the EU, which means that the formal arrangements governing Jersey's relationship with the EU ' Protocol 3 to the UK Treaty of Accession ' will remain in place during that time.

Jersey's Government and industry have been busy establishing the foundations for the Island's future prosperity by diversifying our economy into new service sectors such as digital, and growing and strengthening our links with dynamic markets around the world, in areas like the Middle East, Asia and Africa. This clear plan, together with substantial reserves and a prudent approach to our finances, means that Jersey is in a strong position to take action to stimulate its economy if needed, and to secure our long-term economic future.

"Jersey ministers and officials have worked hard to ensure that the UK Government understands Jersey's interests and will take them into account in its future negotiations with the EU. We have been clear that, whatever the result of those negotiations, the Government of Jersey believes that the Island's best interests lie in maintaining the substance of our current relationships with the EU, as set out in Protocol 3, and with the United Kingdom.

"The Council of Ministers have met to discuss what today's announcement means for Jersey, and to reach an agreement on the work that we will now undertake. I will meet States members later today, and a report will soon be published setting out the Government's position in more detail. Ministers will also be meeting the public around the Island to discuss what this vote means for Islanders and to outline the Government's plan to secure the best possible outcome for Jersey.
"In the coming days, I will write to the Prime Minister to set out Jersey's position more formally, and we will continue to work closely with the UK Government in the weeks and months ahead to ensure that we are kept informed of developments and to safeguard Jersey's interests as negotiations progress.
"Finally, I would like to take this opportunity to say to those currently living and working in Jersey, who are nationals of EU Member States or of countries further afield, that we are determined to preserve their contribution to the Island community, which is both welcome and greatly valued."

-Guernsey  (23/06/2016)  Guernsey comments on the UK's referendum result to leave the EU
In its EU referendum the UK has voted to leave the EU. A decision to leave the EU will take a number of years to take effect. Guernsey is well placed to ensure that any impact that this might have on its trading relationships is minimised, and will put in place any required alternative trading agreements. The UK decision to leave the EU should not directly impact Guernsey's historic relationship with the UK, which predates its relationship with the EU.

Guernsey is not a member of the EU and not part of the UK. Under its Protocol 3 relationship with the EU Guernsey is part of the customs territory which allows for the free movement of goods. For most purposes the islands are treated as third countries and outside of the EU. Guernsey has negotiated market access, or equivalence, with the EU in a number of areas, including the trade in services. Guernsey's long standing policy has been that it is not seeking to change its formal relationship with the EU.

Guernsey was a third country to the EU before the vote, it remains a third country to the EU now, and, it will remain a third country and outside the EU when the UK eventually leaves the Union. However, Guernsey's Protocol 3 relationship, shared with the other Channel Islands and the Isle of Man, will fall away when the UK leaves the EU and will need to be replaced by new trade in goods arrangements.

The majority of Guernsey's trade is through the UK and this trading relationship is not in question. However, in order to remain as stable as possible Guernsey will need to seek to replace the current trading relationship in goods with the EU with some other arrangements. This will be dependent on the new relationship that the UK seeks with the EU.

A Policy Letter will be published shortly to seek a mandate from the States of Deliberation to negotiate with the UK and to protect the interests of the islands. The negotiations with the UK will aim to:

  • protect Guernsey's interest in the UK exit agreement with the EU
  • replace Protocol 3 in the new UK / EU relationship
  • safeguard the longstanding constitutional relationship with the UK
  • seek new opportunities as the UK establishes new trading relationships with the rest of the world

Deputy St Pier, President, Policy & Resources Committee said: "Following the UK decision to leave the EU in this referendum nothing will change overnight in the relationships that Guernsey has with the EU, or the UK for that matter. I welcome the opportunity for debate in the States on how we will manage this transition to ensure Guernsey can seek to remain the same. We will be monitoring the economic impact of this significant constitutional change for the UK and we will be engaging with business, with the Committee for Economic Development, to understand this knock on effect to our economy."

Deputy Trott, Vice President and lead for international business affairs, Policy & Resources Committee said: "The most important part of our external relations has always been to protect and promote our economic interests. Whilst we have our own interests and a different relationship with the EU, the identify framework document we signed with the UK when I was Chief Minister provides a platform on which we can work together to position Guernsey when the UK leaves the EU, to replace Protocol 3 and to secure new trading relationships and access to markets. The trading relationship we have are of a wide strategic importance to or economic interests. This need to be front and centre of the work we do in the coming months."

Deputy Le Tocq, lead for external relations, Policy & Resources Committee said: "The States of Guernsey, alongside the States of Jersey, have been working with the Channel Islands Brussels Office in the run up to the referendum since 2012. We understand our relationships with the EU much more clearly and we have strengthened our relationships with the UK Government in this area. This places us in a good position to ensure that the best interests of the islands and its residents are taken into account during the months and years of negotiations that lie ahead. Whilst there will not be major change for Guernsey, in order to safeguard the best interests of the islands the States will need to ensure we give priority to this work and ensure adequate resources are available to support the our engagement with the UK as it leaves the EU."

-Bermuda  (24/06/2016)  Bermuda industry statement on Brexit

Hamilton, Bermuda, June 24, 2016'International business bodies in Bermuda have reacted to the referendum vote in the United Kingdom to withdraw from the European Union:

Bradley Kading, President and Executive Director, Association of Bermuda Insurers & Reinsurers  (ABIR) : "Bermuda's Solvency 2 equivalence finding by the European Union will serve us well as the UK negotiates its multi-year transition out of the EU. The Bermuda equivalency is unaffected by the UK vote. ABIR has excellent relationships with both UK and EU policymakers and regulators. ABIR members provide vital insurance capacity that makes UK and EU insurance markets more competitive. ABIR members will be reviewing corporate structures to determine what changes in their regulatory footprints may be necessary in order to conform with expected changes in European regulatory governance.

"Meanwhile, we encourage the Bermuda government and the Bermuda Monetary Authority  (BMA)  to continue their wise investment in bilateral relationships that lead to important legal agreements on tax cooperation and transparency, and recognition of robust BMA regulation that is in compliance with international standards. These essential actions are necessary to ensure we retain level playing field access to the world's markets."

Greg Wojciechowski, CEO of Bermuda Stock Exchange  (BSX)  and Chairman of ILS Bermuda: "The result of yesterday's UK referendum in no way diminishes the unique strengths that have for decades anchored Bermuda as a world-class, well-respected, and robustly regulated financial centre. Bermuda's unique geographic position between two of the world's deepest capital markets and largest insurance centres has created commercial opportunity for the island as well as a solid platform to provide services to a global audience'and the Brexit result will not impact this. Bermuda will continue to provide a safe harbour amid uncertainty for the foreseeable future.

"Whether considering Brexit, the Panama Papers, or other challenges, Bermuda's legal, regulatory and commercial infrastructure has always provided clients and associates comfort that their assets and business interests are being managed with due care and protection. While the world wrestles with the impact of the Brexit vote, Bermuda will continue to offer innovative commercial solutions to clients and industry segments we support, and we welcome future opportunities that may arise.

"In respect of the BSX, we continue to drive the development of the domestic capital market to the benefit of the country and Bermudians. This includes supporting niche capital market opportunities such the insurance-linked securities  (ILS)  asset class, for which the BSX is now the global listings leader, with over 70 percent of capacity. In the face of change, Bermuda's ILS platform remains a stable centre of excellence for the creation and listing of these structures and as an industry, we stand ready to provide collaborative support to overseas colleagues to help drive the global ILS market."

Grainne Richmond, President, Bermuda Insurance Management Association  (BIMA) : "As an economic bloc, the European Union is stronger with the United Kingdom in it, yet respect has to be given to the decision of the British people in yesterday's referendum. It will likely take years for a full departure of Britain from the EU, therefore it remains premature to comment on any effects the vote will have on the captive insurance market. BIMA and our members will be monitoring the process closely in the UK."

-Cayman  (23/06/2016)  Premier's statement on the United Kingdom exiting the European Union

Mister Speaker as you would be aware our friends in the United Kingdom have cast their votes to leave the European Union.

Mister Speaker, this referendum was a question for the United Kingdom and its voters but we all expected that the impact of a decision to leave would be felt far beyond the shores of the United Kingdom and would have had political consequences within the UK. It was also expected that there would be uncertainty within financial markets.

This has certainly proved to be the case with Prime Minister Cameron advising today that he will be stepping down as Prime Minister by October and a no confidence motion being brought against the leader of the opposition, Jeremy Corbyn.

And as we have seen, the world markets are now trying to come to grips with the implications of the referendum. There are also other ramifications that will continue to flow from this decision in the weeks and months ahead.

Mister Speaker, it is not clear whether the transition to a new Prime Minister will be an internal matter for the Conservative Party or whether the UK will face fresh elections in a few months.
There is the distinct likelihood of another Scottish independence referendum. Additionally, Northern Ireland, which voted to stay, will no doubt consider its options. These all point to the possibility of a breakup of the United Kingdom.

Mister Speaker, Cayman has certainly benefited from the United Kingdom's link to the European Union in tangible and intangible ways. For example we have been eligible for EU passports, which provided the ability to live, work and travel freely within the EU.

Cayman and all of the Overseas Territories will need to follow closely the political and economic discussions and developments over the course of the coming days, weeks and months.
Of immediate concern though is the question of how any new UK government will view the Overseas Territories, particularly in a new construct of a United Kingdom that is no longer united.
Over in the United States a presidential election looms with the possibility of a radically different kind of political figure becoming the leader of the most powerful nation on earth.

Without question, the world is in for a period of great uncertainty over the course of the next year and perhaps beyond.

There will no doubt be some stormy waters to navigate before the new reality emerges and political and economic calm returns.

In this sea of uncertainty Cayman is an increasingly attractive place to live, work, invest and do business.

Mister Speaker, the sound financial position of the Cayman Islands Government and the growing strength of our economy make us an excellent option for businesses and investors looking for a safe haven amid the current political and economic turmoil.

Even as we watch carefully the developments, we intend to seize the opportunities created by the current uncertainties to build on the economic success this Government has already achieved.
I am confident in the continued success of Cayman's economy. We have for years engaged with the world on matters relating to our financial services industry and we will continue to do so. Our voice will be heard as we have strong links with many partner jurisdictions as well as international institutions.

Businesses based in the Cayman Islands will continue to benefit from that and they, like us, can remain confident in our future.

There will be much to be done as the UK and EU begin to determine a timeframe to unwind their existing relationship and work toward putting in place new arrangements for future cooperation, trade, migration and security.

Some have said this process could take as much as two years to complete and so for us in the Cayman Islands the full impact of the leave decision will not be immediately known, as much will depend on what new arrangements will be made between the UK and EU.

I expect to speak to the Minister for Overseas Territories, James Duddridge, early next week to get an indication on the immediate way forward and the perceived impact the decision will have on the Overseas Territories.

In addition, I will attend the pre-JMC meeting in TCI next month with the Overseas Territories to discuss this issue in detail.

Mister Speaker, it is too early to make predictions or to be able to say what the full impact of the leave decision will be. But certainly it will be profound. It will impact not just the UK and its citizens resident there, but the Overseas Territories, Crown Dependencies and indeed the wider world.
I will continue to monitor developments and engage with the UK Government over the coming days and as soon as the way ahead becomes clear, I will make a further statement.

-BVI  (25/06/2016)  Brexit: Statement By BVI Premier Dr. The Hon. Orlando Smith 

Earlier today it was confirmed that the United Kingdom  (UK)  voted to leave the European Union  (EU)  in a referendum held on Thursday 23rd June 2016.
The Government of the Virgin Islands respects the democratic decision of the people of the UK for Britain to leave the EU.

While the UK's departure from the EU will not be immediate, my Government will be considering the near and medium term implications of the UK's decision on the BVI and will be closely engaged on the UK's negotiations with the EU on the terms of Britain's exit.

As President of the United Kingdom Overseas Territories Association  (UKOTA)  Political Council, undoubtedly I will be discussing the outcome of the referendum and its implications with other Overseas Territory Leaders at the Pre-Joint Ministerial Council hosted by the Turks & Caicos Government in a few weeks.

My Government will keep the public informed of any further developments of importance to the territory.

The BVI continues to be proud of the role that it plays in global commerce and remains an attractive jurisdiction to facilitate international business.

-Gibraltar  (27/06/2016)  Government reassures the public after EU Referendum

In the light of the outcome of last week's Referendum, the Government considers it important that people understand the procedure that exists for the withdrawal of a Member State from the European Union. The procedure confirms that it is very much a case of business as usual for a number of years to come and that therefore people should not expect any dramatic change for a considerable period of time.

The Government task-force which was set up to coordinate referendum legislation with the United Kingdom Government, which included the Deputy Chief Minister Dr Joseph Garcia, the Attorney General Michael Llamas and other officials, will continue to monitor events at a political and a legal level. This will be complemented by the development of new and existing teams and working groups which will be announced by the Chief Minister over the coming weeks. In particular, the Cabinet has to meet to discuss how to give effect to the cooperation with the Opposition which has been agreed.

In relation to the wider picture, it is important to recall that there was no procedure for the exit of a country from the EU before the Treaty of Lisbon. This Treaty was signed on 13 December 2007 and entered into force on 1 December 2009.

The Referendum result is not the legal trigger for the UK's withdrawal from the European Union. The legal count-down will start once the UK Government gives formal notice of withdrawal to the EU under Article 50 of the Treaty. Therefore the commencement of this procedure is entirely in the hands of the United Kingdom. The Prime Minister has already indicated that he will leave this task to his successor in the autumn, and it is likely that negotiations on the options will take place before the trigger is activated.

The exit agreement would first require the consent of the European Parliament followed by the approval of the Member States acting by Qualified Majority Voting. There is therefore no veto on the content of the agreement.

There is a deadline of two years, from the date of submitting the notice, in which to negotiate the withdrawal agreement. An extension of that deadline would require the unanimous agreement of all the Member States. The United Kingdom and Gibraltar would therefore remain a part of the European Union and EU law would continue to apply until the withdrawal agreement comes into effect a number of years later.

The final details of our new relationship with the EU will not be known until those negotiations have taken place and a new arrangement has been agreed.

Commenting on the matter, the Deputy Chief Minister Dr Joseph Garcia said:
"The framework for withdrawal is spelt out in Article 50 of the Treaty of Lisbon. However, no Member State has left the European Union before so there is no exact precedent to be followed. Greenland joined the European Community with Denmark in 1973. They held a Referendum to in 1979 and decided to terminate their membership. This was not implemented until 1985. The point is that it took six years in this case. The Greenland example serves to illustrate the argument that
nothing will happen overnight.

"Gibraltar can rest assured that the Government is actively pursuing a number of options in protecting our future and has the expertise and the energy to do verything possible to deal with any eventuality that may arise. It is important that everyone continues to go about their business in the usual way.

"Indeed, the Government has already held a number of meetings with different organisations in order to explain the position and to reassure the business community that everything possible is being done. This has been put to the Finance Centre Council, the Gibraltar Betting and Gaming Association, the Chamber of Commerce and the Federation of Small Businesses. This contact will be followed by a number of meetings with individual businesses in the field of financial services and on-line gaming.

"It should also be made clear, at the same time, that the Government has already had contact with prominent members of the 'Leave' campaign in order to put forward our point of view and to ensure that those views are taken into account in the negotiation of the United Kingdom's exit and of the new relationship with the EU."