Archive for April 12th, 2011
Korean business fined for hiding profits in Cayman
(Yonhap News): South Korea’s national tax office has slapped a combined US$437.1 million in penalties on businessmen and companies for evading taxes. There were 41 cases of tax evasion detected in the first three months of this year, and those cheaters evaded taxes by hiding personal wealth in overseas tax havens or falsifying export and import documents, the National Tax Service (NTS) said. The tax office said it has levied 410.1 billion won in penaltytaxes on a businessman who operates a fleet of 160 vessels through various paper companies headquartered in a tax haven. The office didn’t disclose the identity of the tax cheater. "The person, who resides in South Korea, has never paid local taxes while holding profits in accounts in Switzerland, the Cayman Islands and Hong Kong," the NTS said.
IRS to focus onrichest with overseas accounts
(Bloomberg):The IRS is focusing on the wealthiest Americans with money overseas as it develops regulations that will require foreign banks to give government more information about those customers. In new guidance, the IRS said it will direct foreign banks to spend less time identifying and monitoring accounts of people with less than $50,000 and more effort focusing on US account holders with more than $500,000 and with private banking relationships. The information provided should help financial institutions figure out the process of identifying US-linked accounts, even though the IRS didn’t answer every question that companies have raised, said Barbara Angus, a partner at Ernst & Young LLP in Washington.
“It has operational impacts on financial institutions, on all aspects of their business, on IT systems, on the account opening process,” she said. “That kind of impact, again, is sort of why information is needed, and needed as soon as possible.”
The requirements, passed by Congress last year, take effect in 2013. They force foreign banks to tell the IRS about U.S. account holders as part of the agency’s effort to combat offshore tax evasion. Banks based outside the U.S. face 30 percent withholding on certain payments from inside the U.S. if they fail to share information with the IRS.
Ex-con advises TCI government on VAT
(TCI Sun): A former Peruvian government minister, who was charged and convicted in his native country on various accounts of high-level corruption, is now one of the chief advisors to the Turks and Caicos Islands Government (TCIG) on tax and revenue matters. Jorge Baca Campodonico was Minister of Economy during former President Alberto Fujimori`s notorious government in Peru. The Supreme Court there, convicted Baca for misappropriating state funds by diverting US$59.4 million from government money to bail out a private bank, ordered him to repay US$666,000 to the state and barred him from holding public office for three years.
Campodonico is now one of the European Union’s team of experts, who is advising the TCI government on how to impose and establish the Value Added Tax (TAX) and other revenue measures.
He recently addressed a meeting of the Turks and Caicos Islands Chamber of Commerce in Providenciales. Campodonico, who was arrested by INTERPOL in Argentina in February 2003, while working for the International Monetary Fund (IMF), was slapped with a four-year suspended sentence in 2008 for having protected the affidavits of former presidential advisor Vladimiro Montesinos and for other corrupt matters.
Cayman courts clear up hedge fund documents
(Hedge Fund Review): Investors and their lawyers have learned to refine and clarify hedge fund documentation as the result of the financial crisis and several decisions emanating from the Cayman Islands courts. Jeremy Walton, a partner at Cayman Islands’ law firm Appleby who specialises in litigation said, “The fundamental messages coming out the Cayman courts, and throughout the offshore world, is one emphasising the clarity of documentation. Contract is king,” he said. Walton points to a recent Privy Council decision in the Strategic Turnaround case as the clearest indication that investors cannot enforce redemption rights through a winding-up petition.
Hedge funds, through provisions in constitutional documents which make up the contract between the fund and investor, allow redemptions and the payout of the proceeds of that redemption to be suspended, confirmed Walton.
Mac to put LA on TV
(CNS): The Cayman Islands premier has announced his intention to launch government’s own television station, which will broadcast the proceedings in the Legislative Assembly, the government’s policy position on issues of the day and emergency or important information. McKeeva Bush said that he believed this would enhance good governance and transparency as the media only gave part of the information to the people. Government’s own station, he said, would be able to deliver its message properly. Hoping to launch it by the middle of this year, Bush said that WestStar TV had agreed to supply the channel free of charge and it would be added to customers’ packages.
Speaking at a public meeting in North Side on Monday evening, the premier said this would not be done by Government Information Services (GIS), the administration’s existing communication department, but would be done directly by the current government. Bush said his government had to be able to get its message out and important information across to the people.
“In order to ensure that we accomplish that, we plan to establish a government television channel. We have had talks with the management of WestStar TV, who have graciously agreed to provide the channel to government free of cost,” the premier revealed. “The TV channel will be included in all of WestStar TV’s packages at no additional cost to the consumer. With this TV channel the government will be able to readily communicate important information.”
Aside from information relating to hurricanes, the premier said it would disseminate information about all government matters on tourism or education and it would show government work going on live. “This is not going to be GIS; this is going to be run by government,” Bush stated without further explanation.
“We will also televise the proceedings of the Legislative Assembly. There will be a regular news broadcast of government information. The policy and position of the elected government on issues will also be communicated on this channel,” the premier added.
Government is aiming to begin broadcasting by the middle of this year, Bush announced, saying it would enhance good governance. While some people may read the Hansard (the transcript of the Legislative Assembly), parliamentary reports, the newspaper and CNS, or listen to the radio, the premier thought television was a more influential medium in modern society.
“I hope it will lead to a greater understanding by the public of what happens in the LA and government as a whole,” the premier said. “I listen to some of the skewed reports coming out of there and I wonder where they come from.” He added that he believed it would prevent reporters from publishing selected exerts that may not truly reflect the proceedings of the Legislative Assembly.
“The public has a right to know and see its Legislative Assembly at work. Many places do that and we are going to do it,” he said. “Something has to be done to get the full truth out. We cannot continue relying on CNS, which only reports one side of the House. Only what the opposition do you will see unless they can make fun of me, and call me something, or tell some lie on me. That’s the only time they report what I say or what I do,” the premier said. “So government will have its own channel where we can educate the people of these islands properly.”
The people had a right to know far more about what happens, Bush told the audience in North Side, than they get to know from the mass media. He said, however, that he believed The Caymanian Compass tries to do a decent job. “They don’t get it all right but I think they do a fair job,” Bush added, as he congratulated the local newspaper.
Paving Cayman Brac
Mac’s global meanderings are a loathsome waste. Extravagant government projects are black holes for precious funds. But here are two little-known projects that utterly floored me when I heard about and saw for myself the evidence of thoughtless spending: the first is the "Grand Highway" to nowhere.
I had the opportunity to attend the annual Agricultural Show on Cayman Brac recently. Last time I was there, the Ag show grounds entrance was a perfectly serviceable two-lane wide marl road leading to the show grounds, and there were marl parking areas. This year I was nothing less than shocked to see a four-lane shiny black asphalt paved double carriageway with tree-planted medians, connecting cross-overs, and additional turning lanes at the end where it intersects the main road. It reminded me of the entrance and main throughfare to one of those ritzy Miami subdivisions. The only thing missing was the guy in a gold-buttoned uniform in a security booth at the entry gate. Off to the side all the trees had been leveled to make way for big paved parking areas. (Could not they have saved at least some of the trees? After all this is an agricultural show venue, so I would think that some greenery — rather than "scorched earth and asphalt" — would be welcome.)
That’s not all folks: To cap it all off, the "Grand Bluff Highway" has two roundabouts! Roundabouts on Cayman Brac! According to some well-informed Brackers, the cost of this project went well into seven figures. This is for a facility that by all accounts gets used only once a year! As I rode from the airport area west on the Brac’s spanking-newly-paved shiny black asphalt north side road (I have no idea what the name of the road actually is since every damn sign I saw had a different name for the road) but anyway, as I went from west to east I noticed that many businesses had newly paved parking lots and it was plain to see more lots were being filled and graded in preparation for paving.
I whiffed the scent of a scandal!
So I asked a friend of mine and they said the parking lots were being paved "free of charge" to the businesses, and that all the businesses on the Brac were to get a paved parking lot. I hope this is just a rumour. But every Bracker I asked about it said this was being done for free. Several said the "UDP" and "Julianna" were behind the Grand Highway and the parking lots. How could the Brackers I spoke with all be wrong?
AMAZING! Hard working civil servants suffer the hardship of pay cuts and social programmes are trimmed so Cayman Brac can have a four-lane freeway that is used just once a year. And Brac businesses get new parking lots! What the hell is the UDP thinking?
All the Brackers I spoke with about this thought that the Grand Highway, while a very nice road indeed, was an overly extravagant expenditure and that in these austere times the money could be better spent to the benefit of the island as a whole. Many Brackers I spoke with about it are of the opinion that the Grand Highway is nothing more than a bold-faced move to buy votes. If that is true, I do not know what to say about the parking lots.
Several Brac residents in the group I spoke with informed me that the main north side road paving work ceased at the end of 2010 and that the National Roads Authority people and the paving crews have been on the Brac preparing and paving parking lots ever since.
Imagine that! It was bad enough to hear about the odd few driveways of political cronies getting a load of marl around election time. But free paved parking lots is so freaking far over the top that I just can not wrap my head around it! It is not even election time! What happens then for chrissake?
One particularly forthright Bracker said he was embarrassed by the wasteful spending and that he and many others on the Brac feared that when news of the projects got back to Grand Cayman that people would be (rightfully) indignant about such lavish spending on the Brac for unnecessary projects.
Now do not get me wrong here, I think Cayman Brac embodies the best of true Caymanian spirit and is my favourite place on earth to unwind. I often hear that the Brac is shortchanged and neglected in a lot of ways, and from all I hear and by what I know of the situation I tend to agree.
Cayman Brac deserves better than this!
For example, I ventured east on the south side road that weekend and I turned around well short of completing the otherwise lovely drive to the east end of the island because of the potholes and poor condition of the road. I was afraid I was going to break an axle on the car! You just can not manoeuvre to avoid hitting potholes; swerve to avoid one and you drive right over three more with car-bouncing, teeth-chattering results. Later that evening after dinner at the hotel when I brought up the subject, I heard tell of people getting flats and other vehicle damage from the potholes. I can see why. Would not the resources have been better spent fixing up that road rather than doing parking lots?
(Now what should I write about the $9-million soon-to-be-commenced "Bluff Grand Resort and Hurricane Shelter"?)