The government wants to turn the UK to “Cayman on Steroids”, warn tax campaigners

The Cayman Islands have just been blacklisted by the EU.

Image by Heidi kiss from Pixabay

The Tax Justice Network (TJN) has accused the UK government of wanting to use Brexit to cut regulations in order to attract dirty money.

After the European Union added the Cayman Islands, a UK overseas territory, to its list of tax havens, TJN chief executive Alex Cobham said:

“The UK government is threatening not ‘Singapore on Thames’ but ‘Cayman on steroids’ – a reckless race to the bottom on tax and financial regulation, in pursuit of global dirty money.”

“The EU has been clear that this will threaten the City’s market access, and while the UK would ultimately benefit from rebalancing its economy away from finance, to go down this road while manufacturing is already exposed to a major shock risks aggravating the economic and human costs of Brexit quite needlessly.”

“The other threat of the EU blacklist, and its politically biased application, is that it risks forcing lower-income countries to align their standards with OECD measures over which they had no influence, and which may not be appropriate to their needs.

“The EU has blacklisted the crown jewel of the UK’s tax haven network while letting other major tax havens off the hook. Cayman is one of the world’s greatest supplier of financial secrecy according to our Financial Secrecy Index.”

“Countermeasures must be taken against the money laundering and tax abuse that Cayman enables. But equal countermeasures must also be taken against the other super suppliers of financial secrecy like the US and Switzerland, and indeed some of the EU’s own member states – the EU must be willing to confront secrecy wherever it originates.

“The EU’s blacklisting of Cayman signals the end of carte blanche for UK secrecy post-Brexit, which has used the City of London and its network of Overseas Territories and Crown Dependencies to siphon and launder huge sums of dirty money from around the world for decades.”

“The UK government is threatening not ‘Singapore on Thames’ but ‘Cayman on steroids’ – a reckless race to the bottom on tax and financial regulation, in pursuit of global dirty money. This would have damaging consequences for the UK as well as internationally, but it may prove to be the EU threat of blacklisting that actually saves the UK from itself.”

The TJN regards the UK as the world’s greatest enabler of tax avoidance and the Cayman Islands as the world’s number one financial secrecy jurisdiction, allowing wealthy people to launder money from crime and corruption and to avoid tax.

Other UK overseas territories or crown dependences which are important financial secrecy jurisdictions include the British Virgin Islands, Guernsey, Jersey and the Isle of Man.

In March 2019, the government was accused of pulling a financial services bill in order to avoid a vote on an amendment on tax haven secrecy.

Companies ultimately owned in the Cayman Islands include the Banks Group, which plans to open a controversial coal mine in Cumbria.

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