Black Immigrant Daily News

Readers are asked to note that Op-eds do not necessarily reflect the opinions or beliefs of Loop Cayman.

by Alric Lindsay

While some stakeholders in the financial services industry may simply view the case of the Queen versus Canover Norbert Watson and Bruce Andrew Blake as just another trial, I believe that the outcome has other, far-reaching implications.

One prediction, for example, is that the Financial Action Task Force (FATF) may now consider putting the Cayman Islands back into its good books in respect of the Cayman Islands’ approach and attitude towards the prosecution of cases related to money laundering.

As to why the Cayman Islands are seeking the good grace of the FATF, those in the financial services industry will recall that the FATF noted at the conclusion of its plenary on October 21, 2022 that the Cayman Islands would remain on the FATF ‘grey list’ i.e., the list of countries subject to increased monitoring, until the Cayman Islands could address certain strategic deficiencies, including by demonstrating that the Cayman Islands are prosecuting all types of money laundering cases in line with the jurisdiction’s risk profile and that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions.

The FATF also urged the Cayman Islands to swiftly complete an action plan by February 2023 as all deadlines have now expired and to address the above-mentioned strategic deficiency.

While the FATF did not state what would be the impact of the Cayman Islands not curing strategic deficiencies by the February 2023 deadline, I think that any failure to do so may result in the Cayman Islands remaining on the grey list or even becoming blacklisted.

Now that the Cayman Islands has the Watson-Blake prosecutions in hand, however, the Cayman Islands may have now repositioned itself to become a fully compliant jurisdiction with respect to the FATF October plenary requests, in particular, by demonstrating a strong stance against the proceeds of crime and successfully getting a conviction in a money laundering case.

Unfortunately, the Watson-Blake prosecutions may have also, inadvertently, cast somewhat of a dark cloud over the legal profession.

This is because Mr Blake is a lawyer and reportedly worked as a lawyer in the structured finance department of an offshore magic circle law firm in the Cayman Islands and overseas prior to, and around the time of, the offences.

With Mr Blake being a part of the Cayman Islands’ legal profession and the offences having taken place while working for a significantly large law firm, I think that the FATF and/or the Caribbean Financial Action Task Force (CFATF) might consider taking a closer look at the legal profession on their next visit to the Cayman Islands.

One of the outcomes of such an exercise may be for the FATF or CFATF to determine whether the “medium-high risk” rating in relation to the inherent risk assessment of International and Domestic Supervised Firms stated in the Cayman Islands’ National Risk Assessment remains appropriate (see table below).

Inherent risk assessment from the Cayman Islands National Risk Assessment

The FATF or the CFATF may also consider whether there are any other inherent vulnerabilities in the legal profession.

Regarding such vulnerabilities, the Cayman Islands National Risk Assessment document dated March 2022 said:

The inherent vulnerabilities of the legal profession must be seen in the context of the jurisdictional vulnerabilities facing the Cayman Islands. These have been identified as being the risk that the Cayman Islands’ financial system could be used as a conduit for the proceeds of financial crime generally, and fraud, bribery and corruption, tax evasion, and drug trafficking specifically. These threats are usually predicated upon the commission of crimes abroad and the decision to funnel those proceeds through structures, transactions, and accounts in the Cayman Islands. The most significant danger for the legal community is the direct participation of firms in that movement of funds through their involvement in such transactions and or the usage of their accounts.

One such inherent vulnerability, in my view, is the prevalence of persons outside the Cayman Islands who are practising Cayman Islands’ law outside the jurisdiction without a Cayman Islands legal practice certificate.

The FATF and the CFATF will, no doubt, find this ongoing practice surprising and will take note that there is no substantial mention of it in the National Risk Assessment in terms of possible impacts on the overall risk assessment for the legal profession.

Exacerbating the situation is that there do not appear to be any plans to apply penalties or fines or to prosecute anyone for the practice of Cayman Islands law outside Cayman for decades without a Cayman Islands legal practice certificate.

Instead, it may be the case (and frightening to imagine if it happens) that regulations may be passed by the Cabinet of the Cayman Islands government to grandfather-in these persons without any fines or prosecution.

In my view, such an action, if done by the Cabinet, would go against the FATF plenary’s material point that strategic deficiencies should be addressed in a number of ways, including by prosecuting cases in line with the jurisdiction’s risk profile and ensuring that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions.

In the circumstances, Cayman authorities should be encouraged to not turn a blind eye to this risk area and, instead, adequately address it to determine how it may impact the overall risk assessment for the legal profession.

Failure to do so may result in the FATF or CFATF launching criticism of the Cayman Islands’ national risk assessment process and, perhaps, leaving the Cayman Islands on the grey list or worse, come February 2023 (the FATF deadline for the Cayman Islands to comply in respect of strategic deficiencies noted in the October plenary meeting).

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Greater San Fernando Chamber of Commerce president Kiran Singh. –

GREATER San Fernando Chamber of Commerce president Kiran Singh and Greater Chaguanas Chamber of Commerce president Richie Sookhai on Friday welcomed the news that TT received more revenue than expected for fiscal 2022. He urged Government to ensure that this revenue is used wisely.

In a statement on Thursday, the ministry said when Finance Minister Colm Imbert presented the 2022/2023 budget in Parliament on September 26, the revenue figures for fiscal 2022 were based on actual figures from October 1, 2021-August 31, 2022 and estimated figures for September 2022.

However, the Board of Inland Revenue has since finalised the actual revenue figures for fiscal 2022 and it has been determined that the total revenue in fiscal 2022 was $54.21 billion, which is $2.57 billion more than the revised estimate announced in September 2022, and $10.88 billion more than the original revenue estimate of $43.33 billion for fiscal 2022, made in October 2021.”

The ministry said, “With total expenditure for fiscal 2022 now estimated at $54.54 billion, the fiscal deficit for 2022 is now estimated at $329 million, which is less than 0.2 per cent of GDP (Gross Domestic Product), well below the international benchmark for fiscal deficits of three per cent of GDP.”

The ministry added,”In essence, we have achieved an almost balanced national budget in Fiscal 2022, something that has not occurred in TT since 2008, 14 years ago.”

Singh said, “The economy has not experienced positive growth for several years.”

He added, “The emergent fact of an almost balanced budget, not seen for several years, sends the right economic signals to local, regional and international investors.”

Singh said it appears that Imbert may have his sights set on a balanced budget next year and ending fiscal 2023 with a surplus.

He attributed the higher revenue in fiscal 2022 mainly to the ongoing war in Ukraine which increased global energy prices and TT benefitted from that.

Singh suggested this additional revenue be carefully dispensed throughout the economy.

Chaguanas Chamber of Industry and Commerce president Richie Sookhai. –

“The war (in Ukraine) will not last forever and the world will find alternative energy sources to survive these tumultuous times.”

Singh believed the four per cent wage increase being offered by the Chief Personnel Officer (CPO) to public sector workers could come under renewed pressure from the trade union movement as a result of the additional revenue for fiscal 2022

“The argument that salaries have not increased but the cost of living is on an escalating path is worrying to the wider public.” Singh said a consensus must be reached between Government and labour on this matter “or we may witness further falls in productivity levels from the public sector.”

Singh also suggested that strategies to provide a more comprehensive and efficient nationwide transport system be looked at with respect to the challenges the public are experiencing with respect to increased fuel prices.

Sookhai said the $329 million deficit for fiscal 2022 “is the lowest seen in over ten years.” He viewed the additional revenue as another affirmation of TT’s economic performance hinging on global energy prices and TT’s constant reliance on hydrocarbon exports.

Sookhai opined that had Government not taken steps to lower the fuel subsidy, the deficit could have been higher than the $329 million figure.

He suggested an assessment be done to determine whether the redirecting of funds from the subsidy to other projects had the desired benefit as opposed to not lowering the subsidy and maintaining cheaper fuel prices.

On public sector wage negotiations, Sookhai said, “While it is apparent that we will earn higher fiscal revenues once energy prices remain high, there is some breathing room for a wage increase. But a balance must be struck.”

He added it was important that increased wages to public sector workers must be accompanied by an increase in public sector productivity as a whole.

Singh said this would be achieved through a combination of improved worker performance and accompanying systems to accomplish simple tasks.

On Thursday, Minister in the Ministry of Finance Brian Manning said the increased revenue will not cause Government to make any radical departures from any of the measures announced in the budget by Imbert on September 26.

“No. We are cautiously optimistic and believe that the measures implemented are the most prudent at this time.”

On September 26, Imbert said Government will not be deviating from the four per cent wage increase offered by the CPO to public sector workers.

“We are firm in our view that our current offer of 4.0 per cent over the period 2014-2019 for the mainstream public service, although it will be a challenge to raise the required funds, is practical and equitable.”

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With assistance from Demerara Bank Limited, the Guyana Government has set up a $900 million revolving fund to increase the production of the forestry sector.

President Dr Irfaan Ali made this announcement while delivering brief remarks at a Guyana Forestry Commission (GFC) stakeholders’ engagement at the GFC Kingston office on Friday.

The President said that with the funds, the Government and the commission will place more emphasis on the development and expansion of small and medium-scale loggers and community loggers associations.

“We are now going to unleash $900m for the market to step up production, so that we can meet the demand, especially for the value-added product, and to push the sector, to give this sector a real boost because we are very concerned about the production level and where it should be to meet our national demand in the markets that we’re building.”

The partnership between the Government and Demerara Bank, once completed, will see the latter contributing $600m and the Government $300m.

These funds, the President added, will attract an “unbelievable” interest rate of 4%.

The Head of State explained that the Government will work along with the bank to prequalify persons based on recommendations from the GFC. After which, a system will be put in place to give access to “bridge financing” in order to increase cash flow toward production.

He emphasised that his Government is committed to supporting small, medium and community-based loggers but that there must be “clarity, good governance, transparency, accountability and a system that works”.

The Government would also continue to invest in infrastructure and encourage loggers to do their part in “accelerating the sector”. This, he said, is aimed at increasing production because he “is not happy with the production that we’re having now”.

During the meeting, President Ali also met with staff from the GFC, listened to their concerns and provided on-the-spot solutions.

One of the issues raised related to the late payment of salaries. To remedy this, the President said, a $100m advance will be given to the GFC to ensure that all of their staff are paid on time.

The Minister of Natural Resources, Vickram Bharrat and other government officials were also at the meeting.

Minister Bharrat along with the Board of Directors and Senior Management of the GFC met with small and large forest concession holders, sawmillers, small loggers and value-added forest producers to discuss opportunities within the forest sector and ways to increase production.

Stakeholders within the forest sector are being urged by the Minister of Natural Resources to increase production, while the Government will continue to enhance access to forest concessions through improved infrastructure and investment incentives.

When the People’s Progressive Party/Civic (PPP/C) Administration took office in August 2020, it inherited a “grossly mismanaged” forestry sector that was on the “verge of collapse. However, through various interventions and initiatives implemented by the Government, this industry has made a turnaround.

Strategies aimed at boosting the financial performance and management capabilities of the GFC were undertaken and in in 2021, the forestry sector was able to make a positive turnover and manage on its own.

In fact, the GFC’s monthly revenue collection was increased from $70 million in 2019 to over $90 million in 2021 while over 100 new concessions were issued to small loggers.

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