Cayman Islands: Government

Principal Government Officials

Chief of State: Queen Elizabeth II represented by Governor Duncan Taylor
Head of Government: Premier McKeeva Bush

The Cayman Islands' physical isolation under early British colonial rule allowed the development of an indigenous set of administrative and legal traditions, which were codified into a Constitution in 1959. Although still a British Overseas Territory, the islands today are self-governed in nearly all respects. The Constitution, or the Cayman Islands Constitution Order 2009, that governs the islands came into effect on November 6, 2009.

The Cayman Islands' political system is very stable, bolstered by a tradition of restrained civil governance, sustained economic prosperity, and its relative isolation from foreign policy concerns by virtue of its colonial relationship with the United Kingdom. Public discussion revolves around public sector expenditure and social services, the pace of additional economic development, and the status of the large foreign national community on the islands.

Government Structure
The Cayman Islands form a British Overseas Territory with a large measure of self-government. Under the 2009 Constitution, the islands are administered by a government that is headed by a Governor, a Legislative Assembly, and a Cabinet. The Governor is recruited from the U.K. Government Service, serves as the British government administrator, and retains responsibility for the civil service, defense, external affairs, and internal security.

The Governor also chairs the Cabinet and appoints to the Cabinet the Chief Secretary, the Attorney General, and the Financial Secretary, while the Legislative Assembly elects the Cabinet's other five members. Unlike other Caribbean Overseas Territories there is no Chief Minister but a Premier (formerly called the Leader of Government Business). The Premier is an elected politician, while the Chief Secretary is the most senior civil servant. Currently, the Premier is also the Minister of Financial Services, Tourism, and Development.

Responsibility for defense and external affairs resides with the United Kingdom; however, the Chief Secretary has responsibility for the Portfolio of Internal and External affairs, and the Cayman Government may negotiate certain bilateral matters directly with foreign governments. The elected members of the Cabinet divide the remaining administrative portfolios.

The 18-seat unicameral Legislative Assembly is presided over by an independent speaker. Elections are held at the discretion of the Governor at least every 4 years. Members of the Assembly may introduce bills, which, if passed, are then approved, returned, or disallowed by the Governor. The U.K. Government also reserves the right to disallow bills approved by the Governor.

The four-tiered judicial system is based on English common law and colonial and local statutes. The Cayman Islands Court of Appeal is the highest court on the islands, but Her Majesty's Privy Council sitting in London may hear a final appeal.

Political Coalitions
Since 2000, there have been two official political parties: The United Democratic Party (UDP) and the People's Progressive Movement (PPM). While there has been a shift to political parties, many contending for an office still run as independents. In May 2009 elections, the United Democratic Party (UDP) defeated the incumbent People's Progressive Movement, receiving nine of the 15 seats. The next election is scheduled for 2013.

FOREIGN RELATIONS
Although the United Kingdom is responsible for the Cayman Islands' defense and external affairs, important bilateral issues are often resolved by negotiations between the Cayman Government and foreign governments, including the United States. The Cayman Islands participates in international organizations such as the Caribbean Community (CARICOM), the Caribbean Development Bank (CDB), Interpol, and the International Olympic Committee (IOC).

Despite close historic and political links to the U.K. and Jamaica, geography and the rise of tourism and international finance in the Cayman Islands' economy has made the United States its most important foreign economic partner. Following a dip in tourists from the United States after September 11, 2001, over 200,000 U.S. citizens traveled by air to the Cayman Islands in 2004; some 4,761 Americans were resident there as of 2005.

For U.S. and other foreign investors and businesses, the Cayman Islands ' main appeal as a financial center is the absence of all major direct taxes, free capital movement, a minimum of government regulations, and a well-developed financial infrastructure.

With the rise in international narcotics trafficking, the Cayman Government entered into the Narcotics Agreement of 1984 and the Mutual Legal Assistance Treaty of 1986 with the United States in order to reduce the use of its facilities for money laundering operations. In June 2000, the Cayman Islands was listed by multilateral organizations as a tax haven and a non-cooperative territory in fighting money laundering. The country's swift response in enacting laws limiting banking secrecy, introducing requirements for customer identification and record keeping, and for banks to cooperate with foreign investigators led to its removal from the list of non-cooperative territories in June 2001.

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