Cayman remains in grey area
(CNS):Cayman has not made the OECD’s White List following a key meeting yesterday. The introduction of the government’s Unilateral Tax Exchange Mechanism which was hoped would ensure removal from the grey list doesn’t appear to have found favour with the international organization’s Technical Committee. The decision has been greeted with dismay throughout the financial industry and particularly in the light of assurances received. CIFSA said it reaffirmed its advice to government that multiple bilateral or multilateral tax information exchange treaties be signed without delay.
In a letter to government last month the new Chair of the Cayman Islands Financial Service Authority (CIFSA) Anthony Travers told the Leader of Government Business that the unilateral mechanism would not be enough to move Cayman to the white list. “Those with experience of dealing with the OECD recognise that the principles of the 1997 OECD Harmful Tax Competition Initiative are being applied to Cayman albeit the process is described as procedural,” said Travers “CIFSA remains of the view that the OECD regardless of their political imperative are obliged to recognise bilateral and multi lateral exchange of information treaties. Accordingly CIFSA reaffirms its advice to government that multiple bilateral or multilateral tax information exchange treaties be signed without delay.”
He explained that it is all about the number and said CIFSA believes that the OECD will next apply a qualitative assessment of the treaty parties and so Cayman will need to have in place in excess of 12 bilateral or multilateral treaties with major G 20 Countries.
The government which issued a release yesterday offering a slightly more positive note regarding the meeting, said that progress had been made stating that the unilateral mechanism was “cleared to go forward,” by the Harmful Tax Practices Sub-committee for review by the Committee on Fiscal Affairs of the Organisation for Economic Cooperation and Development (OECD) which will review it next month.
The government said in the meantime Cayman’s bilateral negotiations were moving forward as the negotiating team is in Paris preparing for discussions today (15 May) with the Netherlands. Other countries in the negotiation programme include Australia, Canada, the Czech Republic, France, Spain and the UK.
Alden McLaughlin, Minister for International Financial Services Policy said the government continues to make solid progress on key initiatives to implement international standards in tax information exchange and said it would be providing details in the coming weeks.
“We have also been made aware of new proposals put forward by the OECD and the UK for Cayman to consider involving multilateral instruments and are seeking details, as OECD staffers are in meetings today until late evening Paris time. We must consider any and all opportunities to further our strategy of employing the most effective and efficient means of getting the result we need,” he added.
Meanwhile the London based Institute of Economic Affairs (IEA) has come out in support of jurisdictions such as Cayman and placed the blame for the global financial crisis on the shoulders of world governments and central bankers. In an open letter the IEA experts write: “No significant changes are needed to the regulatory environment surrounding hedge funds, short selling, offshore banks, private equity or tax havens.”
Travers said that hopefully the message was getting through that the Cayman Islands has a full and effective network of tax transparency treaties and is a totally transparent tax regime which has co-operated fully with the UK, EU and US Governments.
“We are astonished at the ill founded comparisons with the opaque regimes still made by Prime Minister Gordon Brown, Lord Wallace of Saltaire and Senator Levin. The truth of the matter is that the real reason for the unwarranted attacks on the Cayman Islands can have nothing whatsoever to do with tax evasion,” he said. “The concern of those politicians and the OECD can only relate to the increasingly high levels of tax in their respective countries, especially the 50% proposal in the UK. They know that there will be a stampede of individuals and companies attempting to escape their punitive taxes.”
Travers said that President Barack Obama would be better advised to focus his attention nearer to home in the Vice Presidents State, Delaware, where an office at 1209 North Orange Street, Wilmington, houses the grand total of 217,000 companies.
Obama has called out Ugland House on numerous occasions for having 18,000 companies registered there saying it must either be the biggest building in the world or the biggest tax scam.
See letter here: www.iea.org.uk
Category: Business
These posts all miss the point AT NO TIME was Cayman on a black list and our main competitors on a white list.
Wait a minute,
Where did you get the information that there are just two lists? Apparently the OECD doesn’t know this yet. See http://www.oecd.org/dataoecd/38/14/42497950.pdf
No bilaterals do not happen overnight but none in 4 years from the PPM was delinquent.
Actually there were 8 bilaterals in 4 years under the PPM Govt. There were NO bilaterals in 4 years under the UDP Govt. The UDP Govt., on your reasoning, must therefore have been delinquent. Get your facts straight.
Excuse me? Another reason to vote for UDP?? Give me a break! Anyone genuinely concerned about the future of this Country and what it will hold for generations of Caymanians to come cannot in their good senses find ANY reason to vote for UDP!! The glue that BRINGS the UDP together (cuz we all know there is no glue out there that can KEEP them together) is simply made up of ulterior motives, self-interests and all those such things! They are not capable of running this Country unless we are looking for someone to run it into the ground….I honestly believe that most of them (and many of the ‘not-so’ indpendents) actually think that the job of a Politician is not really a ‘job’ but rather a position that would elevate them in society to a level of fame and fortune where they are able to lavish themselves and their friends in….sort of a glamour world. UDP offer NO way forward for the Cayman Islands! Vote PPM for love of Country!
Who will form the cabinet from among the independents and the UDP?
Indepents
If the Independents win the Cabinet will consist as follows:
Paul Rivers: LOGB, Lyndon Martin, Vincent Fredericks, Sandra Catron, Lana-Mae Smith and lastly Frank McField.
It would take at least 6 independents to make the 5 needed.
uhmmm, are you sure you know your letters? You just described PPM to the T.
"leaders are like eagles they do not flock" . Simple colour change will fix it all put this into capable hands on the 21st may vote UDP And get out of the RED and into the GREEN> thats the only into the WHITE LIST
In all honesty, I am a little fed up with the UDP song they have been singing that they failure of the PPM to be proactive is the cause of the challenges we face in this sector. This is rubbish!
Now I am neither UDP or PPM, I am for voting with sense (common or uncommon).
But people think of this – answer this one question: Why did the UDP members of the current house (the opposition) keep silent while our crucial industry was being destroyed?! Why did they not raise the alarm bells…loud?! Why did they just keep strategically quite, while our country major industry was being attacked, just so they could say at elections: it was PPM fault?! Just because you were opposition, did not mean you did not have a voice and actually, could have offered to help the government (if nothing else, make the people hear you saying that you were offering to help). So you know wha…I believe unna just as much, if not more. If you all were so visonary, like you claim, then you should not have made this country suffer for your political gain – shame shame shame on you UDP…you all are NOT with "white" linen on this matter!!
Cayman is on the OECD grey list because the OECD could not justify in good conscience placing us on the black list. The OECD and G20 are making the rules and their intention then, now, and forever is to prevent Cayman from legitimately joining their white list. This has nothing to do with PPM, UDP, or Cayman itself, really. We are caught up in a schoolyard brawl among those who need $$ to fund their government programmes and we are the softest target. We would be in this position no matter who was in office or what was done. If we had signed 20 bilateral tax agreements the OECD would have changed the requirement to 25. Our government will be jumping through hoops and hurdling barriers until the G8 can no longer justify their campaign against us to their voting public. The G8 know that by and large the established OFC’s are legitimate, lawful, well run and regulated jurisdictions, and every contingent the US sends here to investigate report back that there is no story here. It is far easier for politicians to play to the masses and perpetuate the inaccuracies (read outright lies) about our jurisdiction than to actually offer proof of their allegations. I applaud the CIFSA’s efforts to confront these inaccuracies head-on.
Frank Rizzo, thank you for your clear insight into the matter.
Again, too little, too late. Cayman no longer has any leverage is these so-called negotiations.
Does anyone know who is on the "negotiating team"?
"Again, too little, too late. Cayman no longer has any leverage is these so-called negotiations".
Cayman has never had any leverage.
I am voting independent.
Both parties have failed dismally in my view in nearly every area.
Mckeeva and Alden are both out of their depth and its painful to watch embarrassing to see that they can hardly string a sentence together or have any standards of behaviour or basic etiquette and table manners.
Another failure of the PPM for which the Caymanian people and our financial services industry must suffer. Had the PPM listened to the CIFSA we wouldn’t be still on the grey list.
Please Obama, just wait until after we vote in the UDP on May 20th.
There is an interesting overview and discussion of what has transpired at the following link.
http://www.caymannetnews.com/news-15524–10-10—.html
The issue isn’t about not listening to CIFSA. Before CIFSA’s letter to the LOGB (recklessly released to the public) Government was already pursuing bilateral agreements with other countries and publicly stated that. The fact is that because they are bilateral they do not happen overnight.
DONT WORRY BE HAPPY
Where there is a will there is a way Cayman. Put on your thinking hats and stay focused.. We got geinuses living amongs us too you know, why do you think they have traded Beef steak and baked potato for curried chicken and white rice.
Another reason to vote for the UDP
Wasn’t Cayman BLACK listed during the UDP reign?
The Cayman Islands had previously appeared on the FATF Blacklist in 2000.
In 2004, under pressure from the UK, the Cayman Islands agreed in principle to implement the European Union Savings Directive (EUSD), but only after securing some important benefits for the financial services industry in the Cayman Islands. As the Cayman Islands are not subject to EU laws, the implementation of the EUSD is by way of bilateral agreements between each EU member state and the Cayman Islands. The government of the Cayman Islands agreed on a model agreement, which set out how the EUSD would be implemented with the CaymanIslands.[18]
A report published by the International Monetary Fund (IMF), in March 2005, assessing supervision and regulation in the Cayman Islands’ banking, insurance and securities industries, as well as its money laundering regime, recognized the jurisdiction’s comprehensive regulatory and compliance frameworks. "An extensive program of legislative, rule and guideline development has introduced an increasingly effective system of regulation, both formalizing earlier practices and introducing enhanced procedures," noted IMF assessors. The report further stated that "the supervisory system benefits from a well-developed banking infrastructure with an internationally experienced and qualified workforce as well as experienced lawyers, accountants and auditors," adding that, "the overall compliance culture within Cayman is very strong, including the compliance culture related to AML (anti-money laundering) obligations."
UDP Government was formed in 2001.
So the Cayman Islands were blacklisted in June 2000 and elections were held in Novemeber 2000. So the responsibility of the black listing belongs to the Government of 1996 – 2000. Who were they, does anyone remember?
The govt. of 1996-2000 was led by Mr. Truman Bodden (and included his sidekick John McLean Sr.) who is now lambasting the government for incompetence and lack of experience in international negotiations!
To: Anonymous (not verified) on Fri, 05/15/2009 – 16:57.
You left some facts out from your account which seems intended to convey the impression that the only positive strides made were during the term of the UDP Government.
In May/June 2000 by giving an advance commitment to sign Tax Information Exchange Agreements Cayman negotiated itself off the blacklist. Minister McLaughlin was a part of those negotiations.
In November, 2001 the first Tax Information Exchange Agreement was signed with the U.S. having been negotiated under Mr. Tibbetts’s government.
The EU Tax Savings Directive was for a long time strongly resisted by the UDP Government.
No TIEA’s were negotiated between November 2001 and May, 2005, the UDP term of office.
There were no new lists, green, white, grey or black from 2000 until 2009.
The U.S. Government Accountability Office gave a largely favourable report in 2008 and recognized that we are not a secrecy jurisdiction.
Cayman is not currently on the blacklist but on the grey list.