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Tax fairness turning tide for tax havens

Tax fairness turning tide for tax havens

| 11/10/2011 | 0 Comments

(BBC): Around the world, grassroots opposition to tax avoidance is on the rise. But a survey shows that all but two of the UK's biggest 100 companies have subsidiaries in tax havens, from the Cayman Islands to Singapore. So is big business out of step with public opinion? In recent months, a loose coalition on "tax fairness" has emerged, uniting angry taxpayers, business ethics pressure groups and development NGOs. The focus is now on tax avoidance – legal arrangements to pay less tax, sometimes using complicated financial structures – rather than just illegal tax evasion.

One of the campaigning groups, charity ActionAid, has just released data that shows, it says, the "addiction" of the FTSE 100 – the UK's most valuable companies – to tax havens. The data should have been publicly available, ActionAid says, but in many cases wasn't – the charity obtained it by filing complaints to Companies House. Then it counted how many subsidiaries each of the 100 companies has, and the proportion of them that are located in a tax haven.

Of the FTSE 100's 34,216 subsidiaries, about a quarter – 8,492 – are in tax havens.
 

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Cayman’s finance industry needs defending

Cayman’s finance industry needs defending

| 09/10/2011 | 20 Comments

(CNS): Former Cayman Islands Monetary Authority chairman, Tim Ridley, believes that Cayman’s public and private sectors ought to be doing much more to defend Cayman’s stance globally, with nothing less than the islands' financial services industry at stake. Ridley says that the recent report by the Tax Justice Network reveals a continuous need for Cayman to keep presenting what he says is the accurate position about the local financial services industry.  The former CIMA boss said that although efforts are made, they have been “sporadic” and reactive, not proactive as it needs to be.

“The recent highly subjective and somewhat 'short on substance' secrecy report by the Tax Justice Network underscores how essential it is that Cayman presents the accurate position whenever and wherever possible and to those that matter,” he said.

Although Ridley concedes that the Cayman Islands Government and the private sector do, for the most part, appreciate the importance of defending Cayman’s position abroad, he called the actual development and implementation of coherent strategic plans “sporadic” and “reactive rather than proactive.” Both the government and the private sector need to up their respective games, he said, by devoting significantly more time and resources to meet these challenges.

“Those who would bury places like Cayman are in deadly earnest,” Ridley said. “So the very future of the financial services industry in Cayman is at stake." 

The recent Society of Trust and Estate Practitioners (STEP) Cayman Islands event in London, at which Ridley was a speaker, was an excellent example of the type of event Cayman needs to be doing more of, he added.

STEP Cayman Islands played host to a forum chaired by John Humphrys, thewell-known BBC radio presenter, to examine Cayman’s expertise as a leading international jurisdiction in the field of trusts and private wealth structuring and charity and philanthropy, as well as wider business and commerce.

Carlos de Serpa Pimentel, Chairman of STEP Cayman Islands and Head of the Private Client & Trusts group at offshore law firm Appleby, said that hosting a seminar in London was a first for the Cayman branch of STEP.

“Our aim has always been to uncover the truths and myths about the Cayman Islands and to highlight the professional expertise available in the field of trusts and wealth structuring,” he added. Pimentel claimed that Cayman helps the world’s economy by offering a fully tax neutral platform for international financial transactions, which then enables substantial inflows of capital into onshore financial centres, enabling significant commercial investments to take place onshore. “In other words the existence of Cayman facilitates the workings of the world's financial system and makes it more efficient,” he said.

Don Seymour, Managing Director with dms, said Cayman needed to carry on its present course of defence.

“The agenda of the Tax Justice Network is clearly driven by philosophical differences based on ideology and not fact,” Seymour stated. “There is nothing that the Cayman Islands can do to alter this agenda.  Fortunately TJN is a marginal organisation whose ideas are disregarded in the international financial community.  Cayman needs to continue building its relationships with credible international standard setting bodies and not allow itself to be distracted by the vacuous ideas and desperate publicity stunts of TJN.”

The recent report by TJN ranked Cayman as the second most secret jurisdiction in the world behind Switzerland. Although it was dismissed by Cayman Finance, because it said the authors were politically biased against tax neutral jurisdictions, the report was not dismissed by the international media, which within days of the report being published waspublishing the details of the report itself and the analysis that the researchers did on Cayman.

See CNS story Cayman Finance dismisses secrecy ranking.

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Report:US should hunt down tax abusers via treaties

Report:US should hunt down tax abusers via treaties

| 09/10/2011 | 0 Comments

(Reuters): The Internal Revenue Service must make better use of its network of global tax treaties to share data with countries and hunt down tax abusers, said a report from congressional investigators on Friday. The United States has tax treaties and information-sharing agreements with 90 foreign jurisdictions, but limited exchange laws with some of the world's most secretive tax havens in the Caribbean and Europe. As U.S. authorities prosecute offshore tax shelters, notably with investigations into Swiss banks protecting U.S. clients, the IRS must aggressively collect and analyze the data to which it has legal access, according to the report, from the Government Accountability Office.

The IRS should send out more requests for information to treaty partners, the report said.

From 2006 to 2010, foreign countries sent the IRS nearly four times as many requests for taxpayer data as the IRS requested from them. Further, there is a significant lag time for data request responses, often six months or longer.

The IRS "needs to rev up its requests or revamp our tax treaty network to get more taxpayer information and make more headway against rampant offshore tax abuse that disadvantages honest taxpayers," said Democratic Senator Carl Levin, chairman of the Senate Permanent Subcommittee on Investigations, in a statement coinciding with the release of the report.

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First Caribbean buys CIBC for US$76.8M

First Caribbean buys CIBC for US$76.8M

| 09/10/2011 | 0 Comments

(CNS): FirstCaribbean International Bank Limited has announced that it has entered into an agreement with its majority shareholder CIBC Investments (Cayman) Limited, to acquire all of the issued and outstanding shares in CIBC Bank and Trust Company (Cayman) Limited, a Cayman Islands Company and CIBC Trust Company (Bahamas) Limited, a Bahamian company for a US$76.8 million subject to regulatory approvals. Then bank said the move would help boost its wealth management services in the region.

“This acquisition by FirstCaribbean at this time speaks to the confidence we place in our Wealth Segment to leverage the expertise and product offerings of our parent Canadian Imperial Bank of Commerce and become the market leading Wealth services provider in this region,” said Chairman of FirstCaribbean Michael Mansoor as the firm made the announcement.

FirstCaribbean said it will issue 51,917,808 common shares in its capital as payment of the Purchase Price. CIBC Investments (Cayman) Limited will at the conclusion of the transaction own 1,445,725,257 or 91.67% (91.39% prior to the transaction) of the shares of FirstCaribbean.
The acquired entities provide trust and fund administration services business in the Caribbean to private wealth management clients and institutional investors.

CEO of FirstCaribbean Rik Parkhill said the businesses are a wonderful addition to the FirstCaribbean group.  “They are geographically complementary, they possess strong complementary balance sheets, solid and experienced management teams and their operations will integrate seamlessly with FirstCaribbean yielding cost and revenue synergies,” he added.

Ben Gillooly CEO of the firms being acquired said it was great to become part of the FirstCaribbean family.  “We will be able to leverage FirstCaribbean’s diverse footprint in the Caribbean Region to deliver our products and services to Wealth and Institutional Customers,” the bank boss said.
 

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Swiss banks prepare to give up secrets to US

Swiss banks prepare to give up secrets to US

| 07/10/2011 | 0 Comments

(Swiss-info): Switzerland is preparing to send information about alleged tax cheats to the United States, a Swiss newspaper claimed on Friday, without naming its source. The German-language Tages-Anzeiger says there was a “secret meeting” last week between the State Secretariat for International Financial Matters (SIF) and the “core group” of 11 Swiss banks currently in the sights of the US tax authorities. The banks were allegedly told to put together the files of their US clients. A first batch of data is to be sent at the end of October, with several thousand more to follow in the middle of November, the paper says.

An SIF spokesman refused to comment on the report. He told the paper only that discussions with the US were still underway. “Requests for administrative assistance on the issue are evidently expected to be submitted by the Americans shortly,” the paper says. “The aim of a partial handover is above all that Credit Suisse should for the moment avoid an indictment in the US.”

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Saad Group legal battle reaches turning point

Saad Group legal battle reaches turning point

| 06/10/2011 | 0 Comments

(Reuters): Maan Al-Sanea, the founder of Saudi Arabia's Saad Group, has seen a UK court lift a freezing order on $9.2 billion worth of his assets in what his legal team called a "significant turning point" in a bitter legal battle with his in-laws. The move by London's High Court, which follows a similar order by a Cayman court two weeks ago, leaves Al-Sanea free to claim what is expected to amount to several millions of pounds worth of legal costs as well as damages from the Algosaibi family, a London-based spokesman said.

"The lifting of the freezing injunctions obtained by the Algosaibis against Mr Al-Sanea — both in the Cayman Islands and now in England — marks a significant turning point in the litigation between the parties," said Louis Castellani, a lawyer at Harbottle & Lewis, who represents Al-Sanea in London.

The Algosaibis' main lawyer, Eric Lewis, said the family would continue to pursue a fraud claim against Al-Sanea in the Cayman Islands and litigation in Saudi Arabia, as well as continuing to cooperate with investigations in the United States, Switzerland and Bahrain.

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Cayman Finance dismisses secrecy ranking

Cayman Finance dismisses secrecy ranking

| 05/10/2011 | 29 Comments

(CNS): The chair of Cayman Finance and the organisation’s representative in London have both dismissed the findings of the Financial Secrecy Index, published in the UK capital on Tuesday by the Tax Justice Network and Christian Aid. Richard Coles and Jack Irvine both claim that the authors of the report are advocates of global taxation (once referred to by former Cayman Finance Chair Anthony Travers as the "Tax Taliban") who are not taken seriously. Within some 36 hours of the publication of the report, which found that Cayman was the second most secret financial jurisdiction in the world and played a key part in the global financial crisis, it was posted on the websites of more than 70 different international media organisations.

"It beggars belief that the Tax Justice Network still produces these canards about the Cayman Islands,” Richard Coles said in the wake of the report’s publication. “We have never been more transparent and we have never had so many tax treaties with other jurisdictions. What is deeply worrying is that some sections of the UK media take Messrs Murphy and Christensen seriously. These men are high taxation zealots and like the OECD they see nothing immoral in governments taking half or more of a man's salary,” Coles said, adding that they would not be happy until there was a universal global tax rate.

The CF chair said they had failed to notice that the harmonisation of the European Union was what he called a “fiscal disaster” and he believed the “individuality of Cayman in taxation matters should be applauded not vilified."

His comments were echoed by Jack Irvine, the London based advisor to Cayman Finance, who liaises on their behalf with HM Government, the media and Cayman’s London office. Irvine described the secrecy index report as the “same tired old song” that the Tax Justice Network have been turning out for years.

"There are a few facts that your readers should appreciate about this rather grand sounding organization,” Irvine told CNS. “In fact it is a tiny little outfit run out of Richard’s Murphy’s modest house in the English countryside.  Nobody in the financial world takes Mr Murphy seriously. He is an advocate of punitive taxation and he would like all countries to have a common tax system. This is not a man who appreciates individuality when it comes to governments.”

The TJN is actually an alliance of a number of individuals and a non-aligned coalition of researchers and activists with a common interest in what they believe are the harmful impacts of tax avoidance, tax competition and tax havens. Murphy is just one of the individuals who blogs regularly on the subject.

The secrecy index, which ranked Cayman as the world’s second most secret jurisdiction, was written and researched by seven people, including John Christensen, who is the director of the Tax Justice Network International Secretariat and the former economic adviser to the States of Jersey. Nicholas Shaxson, the author of Treasure Islands: Tax havens and the men who stole the world, was also one of the seven members of the team, along with Richard Murphy, who is a chartered accountant and director of Tax Research LLP.

Irvine said that Murphy has the support of what he described as “politically motivated charities” such as Christian Aid and Oxfam, which others would describe as one of the largest and most respected charitable organizations in the world. But he said it was Murphy that was forever “claiming that tax neutral administrations such as Cayman, BVI or Jersey are responsible for the deaths of children in the developing world, in particular Africa.”

The London based rep for Cayman Finance said he believed that the families in lesser developed nations were deprived of aid as a result of corrupt dictators.

He said there would always be sections of the British media who would “dance to Mr Murphy’s tune”, and that it was “no surprise thatthe left wing Guardian is always willing to repeat Mr Murphy’s tirades without question or attempting any balance.”

Irvine didn’t comment on the stories run by the Daily Telegraph, known as a more politically right wing daily newspaper, or those in other more neutral news houses, such as Reuters and Bloomberg.

Within 36 hours of the publication of the report, some 70 different news and business websites had posted the findings of the TJN’s research and in particular the special report about Cayman and what the TJN said was its role in the financial crisis.

Despite this, Irvine said, “The Cayman Islands should be comforted by the fact that the UK government takes no notice whatsoever of either the Tax Justice Network nor The Guardian’s regurgitation of their fantasies and indeed the current UK regime and the House of Commons All Party Parliamentary Group have repeatedly signalled their support of Cayman and its robust financial and legal systems.”

The Telegraph reported that a treasury spokesman has said the UK government was committed to tackling all forms of tax avoidance with an emphasis on tackling avoidance at the root. The UK government would be keeping up the momentum as he admitted more needed to be done.

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Cayman 2nd in TJN’s new secrecy index

Cayman 2nd in TJN’s new secrecy index

| 04/10/2011 | 22 Comments

(CNS): In its 2011 Financial Secrecy Index, published in London Tuesday, the Tax Justice Network has ranked the Cayman Islands as the second most secret financial centre in the world. In what the international anti-tax haven campaigners describe as the biggest investigation of global financial secrecy in world history, Cayman is only surpassed by Switzerland when it comes to secrecy. The TJN said that despite pledges by G20 countries to close down tax haven infrastructure it has barely been reformed. According to the report the second place ranking for Cayman is based on a combination of its “secrecy score and a scale weighting based on its share of the global market for offshore financial services.”

The campaigners said that although tax havens such as Cayman have been “frantically signing” information-exchange agreements with other jurisdictions, to qualify for the ‘white list’ the OECD standards are woefully inadequate. Following claims by world leaders at a G20 summit meeting in April 2009 promising  that “the era of banking secrecy is over” TJN said that its Financial Secrecy Index (FSI) reveals that financial secrecy is as entrenched as ever.

In its detailed report about the Cayman Islands the TJN says that the TIEAs Cayman has signed “under duress” are nothing more than fig leafs and the information sharing under these agreements is of very limited use. 

See TJN’s view of the Cayman Islands and financial secrecy here

View the full TJN index here
 

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ICCI is a new AML testing centre

ICCI is a new AML testing centre

| 27/09/2011 | 1 Comment

(CNS): Cayman’s anti-money laundering professionals are now able to assess their skills at a new testing centre located at the International College of the Cayman Islands. The Association of Certified Anti-Money Laundering Specialists (ACAMS), the international organisation which aims to enhance the skills of AML professionals, recently announced the expansion of a new Certified Anti-Money Laundering Specialist (CAMS) testing centre which will assist people locally as well as regionally in earning their CAMS designation.   

John Byrne, CAMS, ACAMSexecutive vice president said: “The CAMS certification is the internationally recognised gold standard certification for AML professionals, and the CAMS exam rigorously tests for the highest aptitude in the field. Our community spans the globe, and as such, it is the mission of ACAMS to provide the opportunity to validate the skills of our AML professionals, regardless of international boundaries.”

The CAMS Examination is offered in a computer based format at hundreds testing centres located around the world. To search other testing site locations and for more information, visit the ACAMS website at www.ACAMS.org.
 

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Cayman continues decline in global centre rankings

Cayman continues decline in global centre rankings

| 26/09/2011 | 11 Comments

(CNS): Although Cayman has improved its ratings in the Global Financial Centres Index, it has still fallen in the rankings a further eight places. In the 10th edition of the publication which uses peer information to measure and rank all of the centres in the world involved in the financial industry on a variety of indicators, Cayman is now placed at position 46 in the overall table but its ratings score has improved from 587 to 610. The latest report points out that offshore centres have suffered significant reputational damage in the past three years but many are now recovering.

The report said that the recovery was down to respondents to the GFCI questionnaire recognising "the contribution these centres can make to global finance.”

Jersey , Guernsey , Isle of Man , Bermuda and the British Virgin Islands all remain above Cayman in the table but Cayman, along with all the leading offshore centres, achieve higher scores. The report revealed that the improvement in the scores of the offshore centres appeared to be down to the questionnaires supplied by other offshore centres and not coming from onshore jurisdictions.

The report found that once again the top four financial centres were London, New York, Hong Kong and Singapore. The report said this confirmed their strengths in all five areas of competitiveness. “It also confirms our belief that a genuinely top global centre is competitive in all areas – successful people like to live and work in successful centres,” the report stated.

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