Bush signs more deals

| 19/06/2009

(CNS):  The Cayman Islands government has signed a number of supplementary agreements with the Nordic countries at the Norwegian Embassy in Paris today. The Leader of Government Business McKeeva Bush confirmed that the agreements were commercial deals to accompany the main bi-lateral agreements which were signed earlier this year in Copenhagen following negotiations by the PPM administration. Former Minister Alden McLaughlin said he was pleased to see the hard work over the last couple of years had paid off.

Signing on behalf of Norway was Mathias Fredici Kristensen, Norway’s Royal Ambassador extended his appreciation to the Cayman Islands Government. "I would like to congratulate the Cayman Islands on the signing of these agreements with the Nordic countries. These will eliminate double taxation on individuals and on international shipping and air transport, and will establish a mutual agreement procedure in transfer pricing cases,” he said.

McLaughlin told CNS that alongside the UK deal which Bush signed on Monday  the PPM adminstraiton had gone a long way with several other agreements including this one.

"The UK agreement was negotiated before I left office and significant progress had been made on four others," he said. "Our hard work over the past couple of years and in particular that of Debbie Drummond and Dr Chris Rose is continuing to pay off," he said.

The signing of this agreement marks the final stage in the process of completing negotiations with the Nordic countries.

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Comments (11)

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  1. Anonymous says:

     the only advisors to the government who have access to the oecd are the cheif secretary and the attorney general. and i dont think either of these advisors would do anything to harm the country.

    then again perhaps i should rethink my position on the attorney general based on the recent election fiasco!

    • AnotherView says:

      Does anyone know what experience either of these "advisors" have in negoitiating TIEA’s?

  2. Anonymous says:

    My understanding is that while the government had 4 agreements they were working on, none of these have come to anything in 4 years…. in the meantime we are still on the grey list. so it makes sense to progress other agreements as long as they are similar to what we did before. 

    Sitting back and complaining about the oecd and doing nothing is what got us into this position in the first place..

  3. Anonymous says:

    The country spent 4 years and signed 1 agreement. the risk of g20 sanctions etc pushed us to sign 7 agreements "as a group" when we did the onewith the nordic countries. had it not been for that, cayman would still be under pressure now. truth is cayman is still under great pressure from a perception and a business point of view, so it has to get off this grey list.

    We can talk about why we are signing (current or previous govt, does not matter your politics) all day long but it is a fact that eventually most countries will be entering in these agreements as a result of this new g20/oecd push.  

    Tim ridley is correct…there are limited benefits that one can achieve with these things. therefore we should sign as long as the model agreement being utilised does not put us at a disadvantage compared to our competitors. Lets face it—we signed an agreement back in 2000 with the US which is the main source of our financial services business. and since then our industry has grown exponentially so clearly these agreements (as long as they maintain the necessary protections to prevent fishing expeditions) cannot be regarded as harmful. 

    Both governments are correct in trying to sign these agreements as long as they remain in the form they have signed with other countries.

  4. Anonymous says:

    Bad advice – it seems that MAC’s advisors can’t even count.

    According to this story and others this past week, the previous government negotiated multiple tax treaties, more than 4, which are now being signed by MAC on his trip around Europe. Given that we already had 8 agreements before the G20 list was published and we have added the UK double tax treaty to that, with the other 4 treaties already negotiated and to be signed shortly we are going to be well past the 12 needed to get on the white list. So why is there such frenzy for MAC to sign up to treaties that give Cayman nothing. That seems just plain dumb.
     
    Mr Ridley says that different OECD states have different agendas and differing views on offshore countries. That seems about right given what is in the press. Looking at the OECD web site it also seems clear that many of the OECD states don’t have tax treaties or tax information agreements with all the other OECD member states because they cannot get the benefits that they think is appropriate. Given that is the case, what the heck is MAC doing saying he is going to sign treaties with all of the OECD states even if Cayman gets no benefits. That is plain nuts. No one is asking Cayman to sign treaties with all of the OECD states. Going way beyond what the OECD countries themselves do sounds like a re-run of the retrospective due diligence that Cayman got sucked into under the previous financial secretary. That cost Cayman businesses a fortune and it was completely unnecessary and has not helped Cayman in any way in the long term. Has anyone else remembered that disaster?
     
    Mr. Ridley says that it has been the policy of Cayman to get benefits in exchange for entering into tax treaties. That sounds entirely logical. Why would any country do less, especially when its competitors get benefits or do not sign? Any advice which suggests that Cayman should not seek to get benefits clearly is bad advice given that even the OECD states will not sign with each other unless they get what they want.
     
    Come on MAC. You accused the PPM of being asleep at the wheel. Now it looks like you are travelling around Europe with pen in hand ready to sign anything put in front of you while you are asleep. WAKE UP!!!.
  5. Tim Ridley says:

    The issues are multidimensional. Cayman is not dealing with counterparties who all have the same agenda or the same view of offshore financial centres. 

    The stated policy of the Cayman Government has for many years been to try to secure benefits to Cayman under the various arrangements contemplated. The willingness of the counterparties to grant benefits varies. Some take the view that, since there is no direct taxation in Cayman, it is inappropriate to enter into a Double Tax Treaty with benefits and thus insist on a Tax Information Exchange Agreement with no or very limited benefits. Others take a more expansive view. And some want both a DTA and a TIEA! So each agreement will depend on specific (and sometimes lengthy) negotiation. That is why the skills of the Cayman negotiating team are indeed so critical.

    In reality, the benefits that Cayman can secure are usually limited (but nevertheless helpful in the aggregate) to archane areas such as air and shipping, students and pensions, that are relatively cheap giveaways for the other parties. It is (almost) inconceivable that Cayman can secure advantages such as no or reduced withholding taxes on dividends, interest, royalties etc, unless it changes its own domestic regime to tax such receipts here.

    The world is changing very fast. Cayman must change too. And our actions must not simply be limited to DTA’s and TIEA’s. Domestic transparency urgently needs a makeover. And we need to revisit our immigration regime to once again get the brightest and the best not only to set up their financial businesses here but also to establish meaningful physical operations here.

     

  6. Anonymous says:

    he is just completing what Mr. Alden started don’t be too impressed..

    • Lou says:

      According to Anonymous (not verified) on Sat, 06/20/2009 – 07:36, he is just completing what Alden started……..so God help us all!

  7. Clearviewer says:

    Well,well,well, I never thought that this little rock would be in such a demand and suddenly become a pawn to the OECD,s,,  that’s mother country for you. and Mac, they saw you coming and you had better nibble a little before you take that big bite and take us all over the cliff.

  8. M.Western says:

     God I hope your wrong but suspect your right how long has Mac known this new adviser Mr what’s his name? is this may why Alden was taking longer to sign agreements because it wasn’t beneficial to Cayman.

  9. Anonymous says:

    Double taxation agreements like the ones reported in this story and the one with the UK are much better for Cayman than the sign at any cost agreements being advocated by some.

    An associate of mine recently told me about a meeting between government representatives and selected people who work in financial services. Apparently at this meeting one of the government’s key advisors informed the audience that he had been in telephone contact with the bureaucrat at the OECD who is incharge of the program to force Cayman and other smaller financial centres to sign tax information agreements without benefits. This advisor to our government apparently suggested to the meeting that the OECD bureaucrat would help Cayman get off the OECD grey list. While it seems hard to believe, I am informed that there were those at that meeting who seemed to think that the OECD was somehow on Cayman’s side in this. Hands up all those at the meeting whose mother’s had idiot children.
     
    MAC says that he is seeking to attract investment to Cayman and that his advisors are telling him that doing what the OECD suggests will help to bring investment to Cayman. That makes no sense. When the OECD is not chatting up MAC’s advisors, here is what they tell the not-so-gullible part of the world about why it is better to have full tax treaties like Singapore, Luxembourg, Dubai and other financial centres have, rather than the tax information agreements that they are trying to peddle to MAC’s advisors
     
    A wide tax treaty network is helpful to countries seeking to raise and attract investment. They provide investors with increased certainty over their tax treatment, reduce the scope for double taxation of income, and they operate to improve profits and reduce risk. Tax treaties also provide a framework for the exchange of information among tax authorities to counter more aggressive forms of tax planning in relation to foreign and domestic source income.
     
    Clearly the OECD is telling people other than MAC’s advisors that tax information agreements are not the way to go. I am not sure whether to blame MAC’s advisors for trying to convince MAC to sign tax information agreements with no benefits for Cayman thereby giving away Cayman’s future, or to blame MAC for choosing bad advisors. Clearly MAC understood that Cayman should get benefits when he negotiated the savings directive with the EU. Why is he now saying that Cayman should get nothing? He seems clear that he is getting bad advice.
     
    MAC also talks about being like Singapore as reported in the earlier story. Well here is what the OECD bureaucrat who is so willing to give advice to MAC’s advisor tells the not-so-gullible about why financial centres like Hong Kong and Singapore find it better to have full tax treaties rather than the tax information agreements that the OECD is trying to peddle to Cayman.
     
    Hong Kong’s preference is to implement these principles (exchange of information and transparency) by means of full tax treaties since they see the lack of treaties as an important competitive disadvantage…..
    Singapore already has a good network of treaties, but many of these are now showing their age and need to be updated. Also, Singapore lacks (full tax) treaties with some key OECD countries (particularly the United States). This situation reduces their competitiveness.
     
    Now why would the OECD indicate in print for anyone to see that full tax treaties are good for other countries, when they are apparently telling MAC’s advisors that Cayman should not try to get the same advantage. It must be that special relationship that the OECD so clearly has our government’s current advisors. We are so lucky that we have people on the inside with contacts in the OECD as the OECD tries to get MAC to lead Cayman off a cliff. MAC – get yourself some people that can give you proper advice before you sign something that we will all regret.