CI has to improve records
(CNS): Following the first round of the OECD peer review, Cayman has been advised of the need to improve record keeping in the financial sector. In response to some of the shortcomings that were identified in this report, the premier has said government has already taken legislative steps to address the issues raised in the global forum review. The Cayman Islands was one of the first countries to be reviewed regarding financial transparency and exchange of information. Although the report said Cayman had, in general, a well developed legal and regulatory framework, when it came to maintaining accounting information it did not meet international standards. The review also revealed a lack of penalties for entities that do not properly maintain information.
The report said that the absence of appropriate sanctions was of particular concern, given the number of unregulated mutual funds operating in the Cayman Islands. “With an estimated 3,000 unregulated mutual funds resident in the Cayman Islands managing an unknown amount of assets, this deficiency has potentially significant adverse consequences,” thereport said.
The report highlighted the issue that while Cayman has enacted laws and regulations to deal with transparency and information exchange, it still has some way to go before they are effectively and properly implemented.
The review highlighted the particular problem of the exemptions of private trust companies from licensing requirements and said this area of “significant omissions” would be examined during the next phase of the reviews. The peer review also found that the local law in respect of accounting records was inconsistent and did not require partnerships and trusts to keep reliable records.
The report did acknowledge, however, that the secrecy provisions in local laws were over ridden when information is required via ‘exchange of information’ and that Cayman’s network for exchange had developed rapidly. It said the latest changes in legislation would be examined in phase two of the pier review.
Following the publication last week of the reports, McKeeva Bush told the global forum at the meeting in Singapore that the Cayman Islands government has taken immediate steps to address the areas that needed improvement identified in the Peer Review Report.
Bush said that amending legislation governing all forms of companies and partnerships were pushed through the country’s parliament on 15 September stipulating a 5-year minimum retention period for the relevant accounting records that all forms of companies are required to maintain and imposed specific obligations on all forms of partnerships, including exempted limited partnerships, to retain relevant accounting records, including underlying documentation.
“Similar legislative amendments in relation to trusts are being finalized for presentation to our legislature and will be presented in November 2010, at the latest,” the premier stated. This next legislation will be dealing with the issue of trusts, which was identified as a problem by the report.
“In order to address the recommendation relating to effective sanctions, each piece of amending legislation includes provisions for enhanced sanctions against companies, partnerships and trusts where they fail to comply with the statutory requirements to maintain relevant accounting information,” Bush added.
He said the Cayman Islands was committed to doing its part in advancing the work of the Global Forum, demonstrated by the continuing commitment to the process, its participation over the past 10 years and the signing of 20 TIEAs, including 16 of the 30 OECD member countries. He pointed out that the review itself was a significant accomplishment for all those involved and was an important contribution to the understanding of each country’s approach to the global standards.
“As a small country with unique expertise to share, we look forward to making a distinctive contribution in this critical area for many more years to come,” Bush told the forum.
The Cayman Islands was one of the first of eight countries to be assessed under the Global Forum’s Peer Review Programme. The reports of the assessed countries were approved at the Peer Review Group meeting held in July in the Bahamas and were eventually adopted at the Singapore meeting. The Cayman Islands is a member of the Global Forum, as well as a member of the Steering Group and Peer Review Group. The other countries included Bermuda, India, Botswana, Jamaica, Monaco, Panama and Qatar.
Following the publication of these first reviews, the Chair of the Global Forum, Mike Rawstron of Australia, said the jurisdictions involved were taking the standards seriously. “This is the most comprehensive, in-depth review on international tax co-operation ever. There has been a lot of progress over the past 18 months, but with these reviews we are putting international tax co-operation under a magnifying glass,” he said “The peer review process will identify jurisdictions that are not implementing the standards. These will be provided with guidance on the changes required and a deadline to report back on the improvements they have made.
He said the reports show that this is not just a numbers game but about having legal and regulatory frameworks which enable effective exchange of information.
A delegation of eight people from Cayman headed by the premier as minister of finance, attended the meeting in Singapore last week where the reports on all eight countries were revealed as well as the OECD’s next steps for the review process.
The Cayman Islands delegates joined those from 79 jurisdictions and a number of international organisations. During the Global Forum, the Cayman Islands delegation also completed technical negotiations with India and Greece and initialled the agreed text of the tax information exchange agreements with these two countries. It is expected that the agreements will be officially signed before the end of this year
Category: Headline News
So did Cayman really need a delegation of 8 (including a "political assistant") headed by the Premier to attend the global forum in Singapore?
I note that Bermuda sent 4 technocrats – Assistant Financial Secretary Wayne Brown, treaty adviser Laura Hershey, research officer Dennis Simons and legal adviser Shakira Dill, from the Attorney General’s Chambers?
There were 200 delegates from 79 jurisdictions as well as some international organisations (an average of 2.5 delegates per jurisdiction) yet Cayman had 8.
Isn’t it obvious that the Premier continues to squander public funds while preaching austerity?
The size of the delegation is generally established in one of two ways. The first is the amount of luggage required by the head of delegation. The second is based on a well established mathematical formula which identifies the probability that at least one delegate in each delegation will be able to comprehend 50% of what is going on – the lower the probability per delegate, the larger the delegation. [France, Germany, UK, Japan and China sent 2 delegates each – none of their delegates were politicians.] Clearly the Premier was just following established practice – and besides there is this really good restaurant that he wanted to get back to.
Hey, don’t forget the shopping. Why was I not invited to go……
It has been said that men unable to "perform" are easy to spot in that they tend to drive cars which " overcompensate" for their inadequacies. No doubt it is the same with incompetent politicians and the size and composition of their entourages.
Just read govt’s official press release on this. For a global forum meeting Cayman in Singapore had the following delegates
Why did there need to be such a large delegation simply to hear a report as to how we were assessed? Have we added to the civil service a position of "senior political assistant"? Did he travel at public expense?
The Premier
the Honourable Samuel Bulgin, Attorney General;
Mr Cline Glidden MLA, Deputy Speaker;
Mr Kenneth Jefferson, Financial Secretary; Mr
George McCarthy, Chairman of the Cayman Islands Monetary Authority (CIMA);
Mr Langston Sibblies, Deputy Managing Director and General Counsel, CIMA;
Ms Michelle Bahadur, Director, Financial Services Secretariat; and
Mr Richard Parchment, Senior Political Assistant, Office of the Premier.
Actually the government had the OECD report weeks before the Singapore meeting, hence the recent rushed legislation. Such a large number of hangers on went because there is no accountability in relation to how money is wasted in Cayman, and yes they all traveled in luxury at the expense of the suffering people of Cayman.
Incidentally I saw Langston Sibbles flying back on the BA flight on Saturday with one of the other delegates and they were flying CLUB CLASS -thats over 5000$ for the fare – why are civil servants and government employees flying club class?
It is actually closer to $10,000 to Singapore return. Think of the contrast between large numbers of hangers on traveling in luxury at the government’s expense while there are all of those children in Bodden town who were denied text books because the government could not afford them. This is all starting to remind me of the Duvallier regime.
I could have taken notes in shorthand….why wasn’t I invited?
Plausible deniability perhaps?
How can CI be made accountable for correct record keeping and holding those responsible when CIG still does not? Where are the financial records for the last 6 years. Have they given up trying to make up records for that time? What measures of accountability have been taken against the many who have failed in their jobs? 3.2 percent pay cut? Good one.
Hear, Hear.
*applauds*
What about the jurisdictions that directly compete with Cayman such as BVI, T&CI, Bermuda, Barbados, Switzerland, Lichtenstein, Singapore, etc? What are the facts? Do they currently have in force legislation that requires the type of record keeping that the OECD have suddenly discovered are so critical? The gap between what is actually done in "on-shore" jurisdictions and the Cayman Islands is probably not much of substance, but of course they are very good at making mountains out of mole hills when it suits.
Basically some members of the OECD are out to bury us beneath mountains of regulations with which many of their own members are not in compliance or just pay lip service to. Or, they have established huge and expensive bureaucracies to oversee the implementation of the regulations. Does anyone know how much of each tax dollar collected by the IRS actually goes to the US Treasury after deducting the costs to fund and operate the IRS? Same question about the Tax collection/in-land revenue departments of other OECD countries.
It is always the same. The big OECD member states have always insisted that their competitors, " do as they say and not as they do".
They like to use terrorism alot so that they can enforce their measures on offshore financial centers, and know what is in people’s accounts. They say transparency all to dig into people personal accounts. It all has to do with knowing who got money and using it to their advantage, as they weld their power over the nations more and more everyday.
Yeah, and I’ll defend my right to file records in shoeboxes till the day I die.
… now where did I put that shoebox?…..