Travers tells US Ugland House is a necessity

| 17/06/2009

(CNS): As the Cayman Islands delegation continues its wanderings in Europe, aiming to sign the necessary further three treaties to meet the OECD standards to have the jurisdiction moved from the infamous post G20 ‘grey list’ to the ‘white list’, the chair of the Cayman Islands Financial Services Association is trumpeting Cayman’s cause in the US capital. Writing in the Washington Times today (17 June), Anthony Travers says that Cayman is a fully transparent tax jurisdiction and any statements to the contrary are incorrect, including the US president’s comments about Ugland House.

Travers writes that Barack Obama’s much cited criticism of the 18,000 corporations listed in one building (Maples offices in George Town — Travers’ own former workplace) is not justified. He says the "outrage" that Obama cites is a necessity for the firms domiciled there to ensure the application of the Cayman legal system.

Travers states that Cayman directs international capital flows in a tax-efficient manner. “We provide a tax-neutral platform from which trillions of dollars move from international capital markets to the balance sheets of US financial institutions for the benefit of pension funds and universities as well as ordinary investors. At bottom, it is unfair to mischaracterize Cayman as a ‘tax haven’ – a phrase that implies secrecy and wrongdoing – as President Obama and others have done recently,” he wrote.

He says that comparing Cayman to jurisdictions such as Liechtenstein and Switzerland, where he says, “tax evasion actually occurs”, is wrong because the Cayman Islands has full-transparency tax treaties with the United States and the European Union.

Travers also claims that no tax evader would seek to use Cayman, “given the unrestricted powers of the US Internal Revenue Service, the US Department of Justice and the European Union’s treasury departments to obtain full information on any Cayman account.”

He suggests the US should seek transparency with Cayman so that when an account is opened in Cayman the US authorities would be notified to help the US understand that no additional tax revenue is to be derived from the Cayman Islands, because, he claims, it is not used by US citizens to evade tax.

“Tax evasion is illegal. Tax avoidance is not,” Travers writes, adding that describing the tax conduct of every Fortune 500 company that has lawfully relied on a legitimate provision of US law as "using a loophole" is wrong, and implying that Cayman is complicit is unnecessary.

Travers says the United States has the ability to change its domestic tax law and remove the anomalies or loopholes so that tax avoidance will disappear. He defends the international capital markets as “pillars of global financial architecture”, and notes that the Cayman Islands is an important participant in those markets.

”Please, can we stop the unnecessary name-calling that is obscuring the benefits the Cayman Islands has conferred on the United Statesand let the US government use the real facts to decide whether and how to change its tax laws?” Travers asks.

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  1. Annoynomous says:

    Like a Lead Dirrigible

    is the how this ‘tough talk’ will be going over.  The US isn’t going to have any problem changing its laws.  And then it will be, "avoidance; evasion.  Tomatoes;  tomaatos."  What’s the difference?

  2. anoin says:

    "Travers loses all credibility when he implies that Cayman is not used to aid tax evasion."

    Why? you evidence that says Cayman is used for evasion, let’s hear it?

  3. Richard Wadd says:

     Annoymous: You are an Idiot ! If the US (and other countries) has Tax Laws that allow the exploitation of ‘Loopholes’ for their own Citizens and Businesses, what fault is that of ours?

    The Cayman Islands doesn’t (and never has) encourage anyone to Evade Taxes, we simply don’t have certain Taxes here, by choice or by Law, that is our right.

    If the US has a problem, they need to fix it and stop blaming us for it. We can’t change US Laws.

  4. Anonymous says:

    Travers loses all credibility when he implies that Cayman is not used to aid tax evasion.

    • Anon says:

      "Travers loses all credibility when he implies that Cayman is not used to aid tax evasion".

      On that point he does not lose credibility at all, at least not with the informed. He is absolutely correct. If you understand anything about the international tax agreements that we have (including the Tax Information Exchange Agreement with the U.S. signed in 2001 and the EU Tax Savings Directive) together with our internal laws and regulations you would realize that Cayman’s business is not about tax evasion. This only a propaganda by the U.S. Administration because of the tax competition we offer.