HIGGS & JOHNSON COUNSEL & ATTORNEYS-AT-LAW | VOLUME 63, ISSUE 3/2019

WHAT’S INSIDE Due Process Prevails > Health Care Directives in the Tara Archer-Glasgow and Audley D. Hanna, Jr.

> A Thought on Captives

> Organ Donation and the Question of Consent - A Cayman Perspective

> H&J in the News

FOCUS EDITORIAL COMMITTEE

Karen Brown (Chair) Michele Bryan Wendy Stenning Theominique Nottage he Bahamas has been one of domestic law of various multinational Ally Speirs a number of select treaties and conventions. Corey Brown jurisdictions used by high- MLA treaties are agreements between Antonia Burrows net­worth individuals to Rachel Bush T governments that allow a requesting manage their wealth, thus securing its country to obtain information from position as one of the leading offshore specified entities within the receiving financial centres. As such, jurisdiction to assist with proceedings in has a constitution and banking its own courts; meanwhile, convention legislation that provide for individuals legislation* facilitates a similar to have a right to privacy in relation to objective among convention states their property and banking affairs. This without a specific treaty. is a basic principle that arises generally The information contained in this newsletter is provided for the general and at common law. Nonetheless, it is While such requests may extend to interest of our readers, and is not important to note that this right is not various forms of information, individual intended to constitute legal advice. absolute. banking records are often key, as they Clients and the general public are are typically required in a tracing encouraged to seek specific advice on The right to privacy in relation to exercise and/or for the freezing and matters of concern. This newsletter can in property and banking affairs has been no way serve as a substitute. For recovery of assets. While requests for challenged in the context of mutual additional copies of FOCUS, please judicial cooperation in relation to contact us at [email protected] legal assistance treaties (MLA treaties) banking matters are not new, in or at 242 502 5200. and the incorporation into Bahamian H&J FOCUS • December 2019 particular with civil proceedings, they made under the Criminal Justice affiliated with one of the have evolved with respect to criminal (International Co-operation) Act respondents. Therefore, each of proceedings and the worldwide 2000, an order for disclosure was these entities was a ‘non-party’, and shared goal of combating crime and issued that required a number of not accused of any crime. As to money laundering. local financial institutions to release scope, the Brazilian request quite all the banking records relating to broadly sought disclosure of all of the As early as 2003, the Bahamian these individuals and companies, banking records of these entities Supreme Court accepted that**, including the names and identities of since the inception of the relevant particularly in the context of the beneficial owners where applicable. accounts. This was despite the fact global concerns in relation to that all the accounts had been terrorism after 11 September 2001, a The scope and targets of the request operating for many years prior to the greater emphasis should be placed and the order were unusual. In a civil transactions giving rise to the on providing judicial assistance to context, requests for banking Brazilian request with no evidence of foreign countries with respect to information must be precise, and the any previous connection with any of criminal matters. Since then, a court will not permit a ‘fishing the named respondents or any number of statutes*** have been expedition’ or permit someone to use illegality. enacted or amended to make disclosure merely to establish a case. exceptions to the right to Nonetheless, in the criminal context, While the challenge to the order by confidentiality where there is a the court has accepted that, by its the non-parties yielded a partially suspicion of criminal activity, nature, the investigation of criminal positive result in the permitted including tax crimes. conduct may require that requests scope, with the judge using a ‘blue for assistance be rather broad. It is pencil’ and significantly restricting The Brazilian car wash scandal is an usually impermissible to target for the category of information that the incident that highlights the growing disclosure persons who are non- banks were required to disclose, the trend to seek cooperation under MLA parties to the proceeding, and there court declined to set the order aside treaty/ convention legislation and the must be a very clear reason for doing on substantive grounds. Accordingly, uncertainty about the scope of such so for the court to allow an exception the court held that judicial assistance requests in the Bahamas. What to be made. In the criminal context, in criminal matters required the initially began as an investigation into however, non­ parties are afforded utmost degree of cooperation, even money laundering in relation to less protection, as the court has where it related to non-parties and Petrobras – the Brazilian national oil adopted the view that, where where there was a limited company – later became criminality is concerned, as much connection between the non-parties characterised as not only the largest information as possible should be and the actual persons being corruption scheme in Brazil, but also provided so as to assist the foreign investigated. in the world, as other countries government. became involved in an On the basis that the revised unprecedented and intricate web of The order for disclosure was made in disclosure order remained too political and corporate racketeering early 2016 and a number of affected expansive, the ruling was appealed to uncovered by Operacao Lava Jato entities and persons sought to the Bahamian Court of Appeal. (Operation Car Wash). It is estimated challenge the order, in both In a unanimous ruling made on 17 that the amount of bribes paid out as substance and scope. With regard to October 2018 (the ‘ruling’), the part of the corruption scheme is in substance, none of the parties Bahamian Court of Appeal discharged excess of USD 1 billion. challenging the order were named as the disclosure order in its entirety on respondents in the local action, as In 2015, the government of Brazil the basis that the information none were accused of any actual made a request to the government of requested was no longer necessary wrongdoing in the letter of request. the Bahamas for assistance in as the court accepted that the Rather, these entities had merely obtaining banking information about investigation underlying the conducted a very small number of a number of individuals and entities. substance of the request had transactions (in all cases fewer than Arising from this request, in early concluded. Therefore, in essence, any three) with companies indirectly 2016, pursuant to an application continued request for information

PAGE 2 H&J FOCUS • December 2019 about the ‘non-parties’ to the main discretion does remain with the of the particular case. action would be a fishing expedition, court. *Such as the Criminal Justice (International Co which is still , generally, prohibited. Further, depending on -operation) Act 2000, which gives effect to the United Nations Convention Against Illicit Prior to the ruling, there was no circumstances, if clients require Traffic in Narcotic Drugs and Psychotropic indication, other than ensuring that a mutual legal assistance, they should Substances. request was properly issued, that the ensure that their letter of request is **In Attorney General of the Commonwealth Bahamian court would evaluate the drafted properly in compliance with al The Bahamas v Lucini; [2003] BHS J No 32 merits of a request for assistance. the laws of the jurisdiction where it ***Such as amendments to the Proceeds of Further, while earlier cases suggested will be issued and that it relates to Crime Act 2000 and The Bahamas and the that there may be instances where current proceedings. The courts in of America Tax Information the court could intervene, there were the Bahamas remain generally Exchange Agreement Act 2003. no reported cases that provided cooperative with international **Previously published - Due Process examples. With the ruling, it is requests once they are in the proper Prevails, STEP Journal (Vol 27 Iss7). evident that the court will consider form. If the client, however, is the the continued relevance of the person whose right to confidentiality information being sought and will, at is being challenged unfairly, they least to some degree, consider the should take comfort in the ruling, as scope of the request limited to the it demonstrates that the courts in the content of the letter of request. Bahamas will not act as a rubber While there remain some questions stamp and will take away such a right as to the extent of Bahamian courts’ only if due process is followed and discretion to decline to give effect to there is just cause to do so, letters of request, it is clear that such supported by evidence and the facts

Tara Archer-Glasgow is a highly experienced Dispute Audley D. Hanna, Jr. specialises in various areas of Civil and Resolution lawyer with more than 20 years of legal Commercial Litigation, with a particular focus on employment experience in all aspects of commercial litigation, with a law, admiralty law, law, intellectual property particular focus on banking and compliance, employment, litigation, and personal injury litigation. industrial property and company law. [email protected]

Partner Appointments

Gina M. Berry Tara Archer-Glasgow Christel Sands-Feaste Regional Co-Chair - Caribbean & Alternative Dispute Resolution Committee - Director - Bahamas Chamber of Central America, TerraLex International Trademark Association (INTA) Commerce & Employers Confederation

PAGE 3 H&J FOCUS • December 2019 Health Care Directives in the Cayman Islands Wendy Stenning In The Cayman Islands has another person (a “proxy”); or witness. implemented the Health Care  An order is made under the Law The Law does not affect the functions Decisions Law, 2019 (the “Law”) that health care is to be denied of registered practitioners for the which allows a mentally competent or such other order with like giving of palliative care or a person’s individual to issue an advanced effect. right to receive palliative care. The health care directive (a “directive”). Law specifically states that it does The directive should provide The Law provides that an advanced health care directive shall be made not authorize euthanasia or assisted instructions about the nature and suicides. extent of medical care should the by: person become mentally  Completing the relevant parts of There is provision for the recognition incompetent. It can include consent the form in the Schedule to the by health care professionals of or refusal for medical procedures and Law and following the directives executed in certain treatments such as cardiopulmonary instructions contained in the specified jurisdictions other than the resuscitation, being placed on a form; Cayman Islands. ventilator, or use of a feeding tube.  The directive-maker signing the While it can be difficult for an The paramount principle of the Law form personally in the presence individual to consider becoming is that all questions pertaining to a of two adult witnesses (one of incapacitated and no longer being person’s best interest and their whom must be a doctor that is able to make health care decisions, corresponding health care are satisfied that the directive-maker many find comfort in being able to ultimately the responsibility of that is mentally competent and is retain some autonomy through a person’s registered medical freely making the direction and directive. A directive may open practitioner(s). A registered understands its nature and helpful dialogue among a directive- practitioner’s ability to determine the consequences); and maker, his medical practitioners and health care a person receives will those close to the directive-maker,  Both witnesses signing the form. only be superseded where: thereby minimizing the potential for A person being appointed as a proxy difficulties should the time come  An individual has instructed the in the directive may not be a witness. when one is no longer competent to denial of his health care in an Neither may a beneficiary or spouse decide the medical treatment one operative directive; of a beneficiary of the directive- would wish to receive.  The maker of a directive has maker’s estate or person with an delegated the decision to interest under the directive, be a

Wendy Stenning is a Senior Associate in the firm’s Private Client & Wealth Management practice group in the Cayman Islands and provides Will drafting for local and international clients and advises on Probate and Estate administration. [email protected] Associate News

Congratulations to Litigation Jonathan Z. Deal is the newest associate, Theominique Nottage, associate to join the Firm in the on being elected Co-Chair of private client & wealth Young ICCA, a worldwide management practice group. Deal is arbitration knowledge and skills located at the Lyford Crescent office network for young practitioners. in Lyford Cay working under the Nottage is the first Bahamian to supervision of seasoned trusts secure the coveted position. litigator, N. Leroy Smith.

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A Thought on Captives Kamala Richardson

insured and could be set at rates below those available in the traditional insurance market in which premiums take account of the commercial insurer’s overhead costs. Particularized Investments: The investments made by the captive with the premiums received could be invested in a portfolio of assets with a risk allocation which suits the insured’s overall investment strategy and desired asset types. In addition, investment income is retained by the captive for the benefit of the insured. Specialized Insurance Coverage: The captive would devise bespoke insurance policies which cover risks uninsurable in the commercial insurance market with flexible terms more favourable to the insured. Captive Insurance in Wealth Captive insurance is often, and rather commercial context, the captive Management myopically, perceived of as the would be a subsidiary company preserve of multinational established by the parent company The advantages of captive insurance conglomerates whose risks may be to provide insurance coverage to the can also be leveraged in the context too complex or too costly to be parent and other companies within of private wealth management. insured in the commercial insurance the group. Premiums would be paid Therefore, unquestionably, a market. While there is much truth in by the parent or other companies to consideration of captive insurance this statement, in that captive the captive and the captive would, in should form a part of a long term, insurance was pioneered in the turn, issue insurance policies to the comprehensive wealth and risk context of risk management for large companies within the group to insure management plan. scale commercial structures, that them against the risks associated Let’s say you’re advising a family truth undoubtedly belies the utility of with their business. comprised of numerous high-net- captive insurance as an effective tool Advantages of Captive Insurance worth individuals, with a highly to manage the copious, and often diversified asset portfolio containing peculiar, risks faced by high-net- The use of captive insurance offers everything from stocks in Fortune worth and ultra-high-net-worth comparative advantages not 500 companies to rare artwork. individuals. attainable when insurance coverage Establishing a captive insurance is provided by traditional insurers Captive insurance is a form of self- provider for that family would enable including: insurance which is conventionally them to insure their otherwise effected through a special purpose Cost Reduction: The premiums uninsurable assets and retain wealth vehicle that is licensed to operate as charged by the captive would be through investments made by the an insurance company. In a established with input from the captive insurance company. The

PAGE 5 H&J FOCUS • December 2019 structuring of a captive could also The Bahamas: a jurisdiction of be pragmatic in its approach. offer further advantages. For choice for captives In today’s environment, the ability to instance, the captive could be owned When seeking to establish a captive, demonstrate substance is often key. by a family trust and the income the choice of jurisdiction is The Bahamas’ highly qualified generated from the captive’s paramount. The Bahamas’ presence workforce and infrastructure can investments could be distributed to in the captive insurance industry provide the expertise and premises the trust’s beneficiaries, thereby dates back to the 1960’s. necessary to establish the captive’s creating further opportunity for the physical presence within The transfer of wealth from one The regulatory environment in The Bahamas. This can ensure that the generation of the family to another. Bahamas for captive insurance is captive is run with optimal efficiency Additionally, a captive could be a robust and in tune with current and in accordance with international useful adjunct to a family office market trends. Insurance legislation standards of regulation dictated by structure extending the services in The Bahamas prescribes bodies such as the OECD and the EU. provided to a family of high-net- internationally accepted, yet worth individuals to include life, economical, minimum capital healthcare, property and other requirements for captives and vests **Previously published - STEP Journal traditional forms of insurance to regulatory oversight of captives in (April 2019). family members. the Insurance Commission of The Bahamas, a body which is known to

Kamala Richardson is an Associate in the firm’s Private Client & Wealth Management practice group and specializes in wills, estate planning, and matters related to trust law, foundations and company law. [email protected]

Litigation Partner Chairs Session at IBA AGM

Global Managing the annual IBA AGM Committee’s session Partner, Oscar N. held in Seoul, Korea. on product liability Johnson, Jr. and Hanna, in his role as cases. litigation partners, Chair of the IBA The delegates also Tara Archer-Glasgow Consumer Litigation attend the TerraLex and Audley D. committee, member firm, Yoon Hanna, Jr. attended organized and co- & Yang reception, moderated the amongst others.

PAGE 6 H&J FOCUS • December 2019 Organ Donation and the Question of Consent - A Cayman Perspective Wendy Stenning

in” system of consent, instead one significant period before death. For must “opt out” if one does not wish to those other persons who have not be an organ donor. formally opted in or out under the English registration system, if a family A key argument for supporting the push member provides information for the deemed consent approach is immediately before death that would that while surveys in some jurisdictions lead a reasonable person to conclude show an overwhelming majority of that the person concerned would not persons in support of organ donation, have consented, no organ donation many of those same persons never take should proceed. the step to register as an organ donor, resulting in a low donation rate. On the While England has positively sought to other hand, it would be morally wrong legally address ethical concerns relating The Cayman Islands implemented The for those with religious or other to the deemed consent approach, one Human Tissue Transplant Law, 2013 personal reasons for objecting to organ can imagine situations in which it is (the “Transplant Law”) on 31 July 2018, donation to have their wishes ignored if possible that even with these to regulate the donation of organs and they should fail, for whatever reason, safeguards in place, a donation from a human tissue in the Cayman Islands for (e.g. ignorance of the law) to officially person who would have opted out or medical purposes. While this advance opt out. What about those persons conversely who would have opted in, in legislation has been long awaited and who are simply undecided? may have their wishes denied. Is it welcomed by most, organ donation realistic to expect that family members creates many legal and ethical The deemed consent approach also really will get it right or even to assume challenges. raises legal and ethical questions for that everyone has family members? other groups of persons. What happens A key issue related to organ donation is to minors or others suffering from The Cayman Islands have taken a more what should constitute consent on the incapacity that are not legally capable conservative approach under the part of an organ donor. The question of consenting and by the same token Transplant Law. In accordance with the of how consent should be legally are not capable of opting out? What Transplant Law, the Cayman Islands determined is a complex and emotive about those persons only temporarily Government appointed individuals to issue. Free, voluntary and informed resident or vacationing who die in a the Human Tissue Transplant Council consent from the organ donor is jurisdiction where deemed consent (“the Council”). Under the Human generally acknowledged as key for applies, in circumstances leaving them Tissue Donation and Transplant organ donation to ethically proceed. with organs capable of transplant? Regulations, 2018, one of the functions The immense need for organ of the Council is to maintain a Tissue transplants has caused many England is one jurisdiction that is Donation Register for the Cayman jurisdictions to move away from this transitioning to a deemed consent Islands. The Council shall only register a principle. This article explores some of approach. The Organ Donation person as a donor if it is satisfied that the concerns regarding the question of (Deemed Consent Act) 2019 (“the Act”) the person – consent in relation to organ donation, has been approved by Parliament and and discusses the Cayman Islands will come into effect in April 2020. The  is an adult; Act provides that the deemed consent approach to this complex issue.  is not suffering from a mental approach will not apply to: (i) persons Deemed Consent disorder that renders the person under eighteen years of age, (ii) incapable of understanding the Severe shortages in organs available for persons who have not been ordinarily nature and consequences of the transplant have caused many resident in England for a period of at donation; jurisdictions to adopt a “deemed least twelve months immediately prior consent” approach. In those to death, and (iii) persons who did not  is making the donation voluntarily; jurisdictions, rather than having an “opt have the capacity to consent for a and

PAGE 7 H&J FOCUS • December 2019

 is adequately informed about and trading in human tissue including its commitment to engaging with the understands the nature and organs. It provides inter alia that a pubic to address cultural attitudes and consequences of the donation. person shall not – fears surrounding organ donation and (a) buy, agree to buy, offer to buy, hold to keep the public informed as the The Human Tissue Donation Register himself out as being willing to buy, or organ transplant process develops. maintained by the Council shall be the inquire whether a person is willing to only human tissue register having legal The Cayman Islands has taken a buy, or inquire whether a person is validity for purposes of a donation in momentous step in its legal and willing to sell tissue; the Islands. medical history by implementing (b) give or receive benefits for the legislation to allow organ donation and Organ Trafficking supply of, or for an offer to supply transplant locally. The Islands have tissue; or The severe shortage in organs available taken the approach that free, voluntary (c) initiate or negotiate any for donation has also raised a deeper and informed consent by adults with arrangement involving the giving of issue relating to consent as organ full capacity during their lifetime is benefits for the supply of, or for an trafficking and transplant tourism has necessary. There are those that may offer to supply, tissue. emerged in response to this say it does not go far enough to address challenge**. Organ donation has The Transplant Law does not prevent the urgent local and international need started to take a commercial route the giving of reasonable costs for organ donors. Nonetheless, for a whereby people donate their organs in associated with – country with a very small but transient exchange for cash. It is argued that (a) the importation and exportation of and culturally diverse population that is persons deciding to sell an organ are, tissue into and out of the Islands; only just beginning its journey in the after all, making the decision (b) the transportation, removal, world of organ donation, this is a sound voluntarily. Unfortunately, it is believed evaluation, storage and processing of approach and a mammoth step that the reality is that many times a tissue to, from or at a tissue bank; and forward. As the Ministry of Health seeks decision to donate a kidney is due to (c) the distribution from a tissue bank to educate the public about organ the donor being in financial distress. of tissue removed in accordance with donation, it is hoped that the One has to question how free, the Transplant Law. Transplant Law will be embraced voluntary and informed their decision leading to the registration of significant The Council may, by a permit in writing, really is in such cases. Are they aware numbers of persons as organ donors. authorize a person to buy tissue from of the jeopardy in which they are the body of another person subject to *See paragraph 11.1 of Organs for putting their health and the risk of such conditions and restrictions as may Transplants: A report from the Organ death? If there were financial means or be specified in the permit, if the Council Donation Taskforce, Organ Donation other support available to them would considers it desirable by reason of Taskforce, Department of Health, UK they really make a decision to donate special circumstances to do so. published in January 2008 an organ in exchange for cash? Implementation of the Organ Donation **Transplant ethics under scrutiny – The Cayman Islands have adopted a System responsibilities of all medical conservative approach that prohibits professionals, Croat Med J 2013 Feb; 54 commercial dealing in human tissue but While the Transplant Law is now in (1) 71-74, Torsten Trey, Arthur L. Caplan, it does allow some flexibility to cover effect, there is still much work to be and Jacob Lavee reasonable costs associated with done. The Council continues to work on certain aspects of the transplant developing a framework that process and the Council can approve establishes criteria and guiding **Previously published - TerraLex the purchase of tissue if special principles that regulate the local human Connections, December 2019 issue circumstances exist. tissue transplant centres. The Ministry of Health for the Islands has expressed The Transplant Law generally prohibits

Wendy Stenning is a Senior Associate in the firm’s Private Client & Wealth Management practice group in the Cayman Islands with significant experience advising trust companies and high net worth individuals on the establishment and ongoing administration of a variety of trusts and the registration of private trust companies. [email protected]

PAGE 8 H&J FOCUS • December 2019 H&J News Annual Client Seminar 2019

HIGGS & JOHNSON hosted its annual client seminar under the theme ‘Fast- Forward: Regulation, Legislation & Application’. The seminar delivered thought-provoking sessions on topical issues with a focus on financial services, technology and digital currencies. This year’s theme addressed the importance of being proactive in this rapidly changing environment. Partner and chair of the Private Client & Wealth Management practice group, Dr. Earl A. Cash, in his welcome remarks, spoke to the ‘advancement of technology…how it continues to change at a rapid pace, launching us into an era that will be unlike any other before it’. Opening remarks were given by the Deputy Prime Minister and Minister of Finance, the Hon. K. Peter Turnquest. Deputy Prime Minister Turnquest charged those in attendance to ‘embrace the call to innovate; explore and expand into new markets; embrace new technologies; and carve out new ways to add value.’ Bahamas Associate, Andre Hill, summarized the recent legislative changes affecting the legal landscape in The Bahamas with regards to the recently enacted Register of Beneficial Ownership Act, 2018. Bahamas Partner and Chair of the Financial Services and Securities practice groups, Christel Sands-Feaste alongside Cayman partner, Francine Bryce provided a comparative analysis of the economic substance requirements introduced in The Bahamas and Cayman Islands. Jeremy Stephen, Lecturer at the University of the West Indies – Cave Hill campus, identified the regulatory and economic challenges in light of the rising use of technology. Associates, Kamala Richardson and Nia Rolle, highlighted viable vehicles in wealth management – specifically the advantages of the Private Trust Company. A panel discussion on The Bahamas’ potential accession to full World Trade Organization (WTO) membership concluded the morning session. Bahamas Partner, Michael F. L. Allen chaired this segment fielding questions to the panel of experts, Jeffrey Beckles – Chief Executive Officer of The Bahamas Chamber of Commerce and Employers’ Confederation; Dr. Allan Wright – Senior Country Economist of the Inter-American Development Bank; and Bahamas commercial partner, Portia J. Nicholson. Commentary by both the panelists and attendees facilitated a lively and productive discussion on the WTO including predictions for the future. The seminar concluded with an informative and engaging presentation on Project Sand Dollar by lunch time guest speaker, Jay Joe – Chief Executive Officer of NZIA Limited, the company contracted by the Central Bank of The Bahamas to fulfill ambitions of developing a digital version of the Bahamian dollar.

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