Goal posts move on TIEAs
(CNS): On the eve of Leader of Government Business McKeeva Bush’s appointment to sign Cayman’s 11th Tax Information Exchange Agreement, this time with the Netherlands, two OECD countries have indicated that the proverbial goal posts may have shifted once again when it comes to measuring cooperation on fighting global tax evasion. According to reports from a summit in Evian, France, British Prime Minister Gordon Brown and French President Nicolas Sarkozy have called for a March 2010 deadline for sanctions against tax havens that fail to bring their transparency up to international standards.
The UK and France have indicated their desire to see country by country reporting and that twelve agreements alone are not enough to rescue countries from the infamous ‘grey list’.
As Bush prepared to sign a TIEA in Holland on Wednesday, 8 July, in an effort to reach the OECD standard of twelve tax agreements to remove Cayman from the ‘grey list’ and the stigma of an un-cooperative jurisdiction, both France and the UK said they will remain vigilant in ensuring that the 42 countries still on the OECD ‘grey list’ meet their commitment to apply international standards for the exchange of tax-related information.
France and the UK indicated that they will combine efforts to reinforce the coherence and effectiveness of international action over tax evasion. “We agree that the threshold of 12 tax information exchange agreements should be seen as a starting point in the move towards greater tax transparency. If progress stalls we will expect the threshold to rise above 12, bringing those who have not made further progress back into the ‘grey list.”
Former chair of the Cayman Islands Monetary Authority and offshore expert Tim Ridley told CNS that this communiqué echoes the sentiments voiced in the wake of the recent summit by the OECD. "This development is unfortunately only confirming the noises previously coming out of the OECD, i.e. that effective implementation is now to be the benchmark,” Ridley stated. “Whether Cayman will make it past the post before this policy is formally implemented by the OECD (at the direction of their political masters, the G8-20) is hard to call. Although Bermuda’s recent promotion to the white list gives some cause for optimism, I err on the side of caution, as history tells us that Cayman traditionally and unfairly gets the run around. I hope I am wrong."
Speaking in Evian on Monday, Brown said: "The world should be in no doubt that the writing is on the wall for tax havens," Brown said. "Tax transparency, full exchange of tax information and reducing tax avoidance are crucial for the health of the global economy," Brown said.
The indication that 12 agreements may not be enough but that actual evidence of implementation would become the real key to movement from the ‘grey list’ was given by OECD Secretary General Angel Gurria at the close of the Berlin Summit. In his address on 23 June he said that while the 12 agreement threshold is a good indicator of progress, it should not be seen as just a “numbers game”.
“All countries must aimto have high quality agreements which are effectively implemented with all interested countries,” he said. “It is for this reason that the Global Forum will strengthen its peer review process to focus on effective implementation of the transparency and exchange information standards.”
Meanwhile, in the OECD’s updated list published on 3 July the Cayman Islands remained on the grey list with 10 TIEAs signed. The footnote acknowledging the jurisdiction’s unilateral mechanism remained, stating that the OECD was reviewing this legislation.
Category: Business
Since we are being forced down this path why not take the bull by the horns and lead the world forward instead of kicking and dragging our heels. Cayman is more tightly controlled and cleaner than any free country on the planet. Just try and open an account here or deposit a reasonable sum of cash or even a cheque in an established account and see how difficult it is. I think that our early history of secrecy has made us gun-shy on the subject. We feel a little guilty and unsure about our past instead of being proud of our strong financial system of scrutiny and commercial integrity. We don’t have anything to hide. Instead of sticking our tail between our legs, we should be demanding that the world emulated us. I recently saw a report that Cayman is the 5th largest holder of USA government debt. We might be small but in the world of international finance we are huge. Cayman should push forward as a world pace-setter instead of a reluctant, somewhat intimidated follower.
Acting without thinking is not what Cayman needs when dealing with the OECD, the EU, the G8 and the rest. Cayman is in a very dangerous situation and unfortunately action man clearly has had no communication with thinking man when it comes to preserving the long term interests of Caymanians in these complex international matters. It is also clear that trying to navigate these waters with no idea of where you should be going, a chart supplied by the OECD, a seemingly complete ignorance of what competitors are successfully doing and a completely inexperienced crew is not something that a smart captain would do.
If this situation was not so serious it would be laughable. There is no end to this madness of TIEAs. Everytime the Cayman Islands make two steps forward the OECD effectively changes the rules and renders us three backward. Nothwithstanding, the UDP government is to be commended in their valiant efforts to naviagate the islands through these challenging times, and they have what it takes to move us forward: the man with a plan, Mr. Bush, Premiere Designate.
Mac doesn’t have advisors he has handlers…..we Caymanians would say that is "much worsa"
The UK is just jealous that they can’t CONTROL the world. Same as the U.S. Well guess what guys not everyone is an American or Brit and with all the scandals (Madoff and Stamford) erupting in those countries that are so HEAVILY regulated why would any emerging country want to leave them as the overseers? As for the OECD they can’t even get it right so how can they judge.
P.S. There isdirty money located all over the world and there is A LOT in the U.S. and U.K. get your own backyard clean before you go trying to clean up someone else’s.
I hope you all realise now that this matter is far too complex for Mac and his advisors to understand….they don’t understand the very precarious position that they’re putting this country in. This whole matter has gone straight over their heads. Well this UDP government is apparently what the country wanted and they say that a country gets the government it deserves !
While we should make every effort, this is well said, as we all know that the G20 especially England want us swept under the rug so being caustious is very wise and prudent. New government be alert and wise,we cant afford to let them ruin us. Watch out for our future.
Fools on a fool’s errand – chasing the moving OECD target that they will not catch until the OECD is convinced that Cayman is finished as a financial services jurisdiction.
When Cayman private sector individuals and politicians signal to the world that they have no clue what they are doing and that they will sign anything put in front of them, should it really be a surprise to anyone that the OECD cannot believe their good fortune. Of course the OECD will move the goal posts and adopt new subjective standards which will make it easier for them to arbitrarily say which of their competitors is “good” and which is “bad”. It is obvious to everyone except our current government and its advisors that simply doing whatever the OECD says will not ensure that Cayman is labelled as “good” by the OECD.
While we should make every effort to get off the grey list, we should also exercise caution because the G20 have been gunning for Cayman for years and now is their opportunity to leverage this "grey list status" over our heads in the hopes that they can get whatever they want. We must be cooperative but we must also be extremely careful; our country is at stake here.