Cayman Gains Partial Victory Against European Union on Savings Tax

At the end of March 2003, the Cayman Islands Government announced that the European Court of Justice’s (ECJ) Court of First Instance (CFI), although dismissing the Cayman Island’s application for the establishment of a Commission Working Party on the issue of the Savings Tax Direction, said that the European Union (EU) cannot require the Cayman to implement the proposed Directive on the Taxation of Savings Income. The ECJ has explained the decision in a way not as favorable to the Cayman. At a press conference the Hon. McKeeva Bush, the Cayman Leader of Government Business, announced the result. The Court ruled that the United Kingdom was not legally required as a full EU member to impose the ruling has favorable constitutional law implications for the Cayman Islands. According to the ECJ, the issue of whether the UK could constitutionally impose the Directive on the Cayman Islands by an Order in Council was outside the ambit of the ECJ. Instead, it depended on the exact constitutional and legal arrangements between the UK and the Caymans.