Cayman 2nd in TJN’s new secrecy index

| 04/10/2011

(CNS): In its 2011 Financial Secrecy Index, published in London Tuesday, the Tax Justice Network has ranked the Cayman Islands as the second most secret financial centre in the world. In what the international anti-tax haven campaigners describe as the biggest investigation of global financial secrecy in world history, Cayman is only surpassed by Switzerland when it comes to secrecy. The TJN said that despite pledges by G20 countries to close down tax haven infrastructure it has barely been reformed. According to the report the second place ranking for Cayman is based on a combination of its “secrecy score and a scale weighting based on its share of the global market for offshore financial services.”

The campaigners said that although tax havens such as Cayman have been “frantically signing” information-exchange agreements with other jurisdictions, to qualify for the ‘white list’ the OECD standards are woefully inadequate. Following claims by world leaders at a G20 summit meeting in April 2009 promising  that “the era of banking secrecy is over” TJN said that its Financial Secrecy Index (FSI) reveals that financial secrecy is as entrenched as ever.

In its detailed report about the Cayman Islands the TJN says that the TIEAs Cayman has signed “under duress” are nothing more than fig leafs and the information sharing under these agreements is of very limited use. 

See TJN’s view of the Cayman Islands and financial secrecy here

View the full TJN index here

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  1. Anonymous says:

    Why are we surprised?  This is just a reflection of who we are as a society and our politics.  The politicians here conduct their business in such secrecy and only thanks to FOI can someone sometimes get to the truth of anything and get an inkling of what is going on.

  2. Anonymous says:

    So TJN thinks we should all be completely transparent with bureaucratic bullies like the IRS and HMRC? Risk our hard earned money in the hope that they will somehow follow the rules or be fair? TJN are idiots.  Go Cayman! 

  3. tim ridley says:

    If you get to set the questions and to mark them as well, it is not difficult to reach the conclusions you desired at the outset. So we should not get too annoyed with reports of this nature.

    What is concerning is that these reports however flawed, when cited sufficiently, become self-fulfilling and thus potentially damaging. So tiresome as it seems, it is necessary that Cayman push back wherever and whenever possible to set the record straight.

    But, and perhaps more importantly, Cayman does urgently need to revise its Confidential Relationships (Preservation) Law (and related legislation) as part of its holistic reworking of data privacy. We become an easy and unnecessary target if we continue with anachronistic and unhelpful laws and practices that are out of tune with current international standards.

    • Artful Dodger says:

      The questions seemed fair and objective.  The TJN history and review of Cayman seemed quite accurate.

      CRPL is a disgrace.  But that is no less of a disgrace than the absence of public access to directors, articles and share registers.  Daylight is the best disinfectant.  Cayman likes to stay in the dark.

      • tim ridley says:

        The CRPL is much misunderstood and maligned. It pretty much reflects the English common law principles of confidentiality, with the addition that breach can be a criminal offence. It also contains a number of gateways for disclosure in appropriate circumstances. In practice, it has actually worked quite well. But it has become the unfortunate poster child for "secrecy laws' in the minds of the often uninformed media and shouting classes. So what we need is a well balanced Data Privacy Law that covers all types of information and its protection and disclosure.

        Transparency or opaqueness is often simply a matter of perception. Most relevant information in Cayman can be obtained by private litigants in local court proceedings and by local law enforcement and regulatory authorities in the execution of their functions. There are also numerous gateways for cross border disclosure of information in the right circumstances.

        I agree that all documents filed with the Registrar of Companies and the Registrar General should be open to public inspection (for a reasonable fee to cover costs). I also agree that the Monetary Authority should be permitted to make greater disclosures about the entities that it supervises.

        On the other hand, I see no reason why the media and its acolytes should have ready access to purely private documents and information on the basis that they think it is in the "public interest" that they should.

        Tim Ridley



        • Artful Dodger says:

          Now now Tim, we all know that is the "official" story.  But it simply is not true.  The imposition of CRPL was a politicial reaction to shore up banking secrecy at a time when attempts were being made to investigate the abuse of Cayman by onshore tax payers.  It went beyond the common law by the imposition of a criminal sanction and the tortuous process of a court application.

          Lawyers in Cayman have to repeatedly tell clients that in order to disclose ordinary documents they will need to issue a Court application which often takes months to sort out and can cost hundreds of thousands of dollars in Court fees.


          • Anonymous says:

            Regulator to regulator exchanges bypass the courts and have for years.

          • tim ridley says:

            I was not commenting on the circumstances surrounding (or the wisdom of) the initial enactment of the CRPL in 1976 and its significant amendment in 1979. That history is well documented elsewhere.

            The fact that court approval is required, unless one of the 6 listed gateways (or one of the gateways under other Laws) applies, seems to me to be entirely correct and a very proper protection against improper disclosure. And as I commented above, the procedure is well established and well trodden.To eliminate that procedure would in fact be very unwise and really muddy the waters, even if the criminal penalties were abolished.

            There are many good and legitimate reasons to give statutory protection to the right to privacy and to confidential information.  This protection is an entirely proper part of the rule of law. And requiring court approval to disclosure other than under a specific gateway is also an entirely proper part of due process.

            Slightly tongue in cheek, much of this is water under the bridge in financial services as most institutions have for years provided in their standard terms and conditions of business that they can disclose confidential client information when they see fit!

        • Chris Johnson says:

          I do agree with you Tim, that all documents filed with the Registrar should be open for inspection and there cannot possibly be any objections to that, except of course by those directors holding hundreds of directorships who thrive on the lack of transparency.

  4. Anonymous says:

    You really think the same politicians want this to really happen. They too would lose and have to pay more taxes.

  5. Anonymous says:

    Seems to be a bad, biased & misleading result. If it's based on secrecy & size, we could be not very secret but very large (so rank high) versus a country that is outrageously secret but selective about it. Just because we have a large financial services industry doesn't mean that it is all secret & criminal. Cayman-bashing troublemakers.

  6. Anonymous says:

    not good news for our tax evasion indusrty…..i mean fiancial services……ssssshhhhhhh!

    • Anonymous says:

      If we did have a tax evasion industry then this would be good news indeed. It would be good advertisement for tax evaders. But no well-informed tax evader would seek out Cayman for that purpose given all of the avenues available for foreign taxing authorities to obtain his information.    

  7. Anonymous says:

    Great news!  I really hope this helps to drive my propery vaule up.

  8. Dominique says:

    Oh, I'm so surprised, I hope no one expected LONDON to say anything good about the Cayman Islands.  Well LONDON, I think that 2nd place is the first loser, Cayman should have been #1, then I would feel much better. I don't want them to know how much I have here, but it's doing tens of thousands very good.

    • Caymanian to the Bone says:

      Dominique I take off my hat to you.  What you say is true, also I believe you are a Foreigner who has run the track and won the race.

        I take off another hat to you for feeling good about your tens of thousands,  Very good,  my friend and dig your feet into the white sands of Cayman and enjoy every cent of it.  Good to have you here.

  9. Mr. Snuffulupagus says:

    Woo Hoo!  We're number 2!! We're Number 2!!

  10. Artful Dodger says:

    Maybe we should go back to the drug money laundering and tax evasion assisting days that built this place and try for number 1 spot next year.

    • Agreed says:

      Artful Dodger I hear you. And I smile as I agree with you.  Those were the good old days, wasn,t it, when you could ride your horse from Miami to Cayman with a waggon load of money.   I miss those days.   Every body was happy, those who had it made sure that those wo did not have it  were happy too.  I miss those days because we were all one happy family here.   95% of money is washed in some kind of soap powder,   It is your money and I could care less how it got here.  Lol..

  11. Chris Johnson says:

    This comes as no surprise to most of us. There is no transparency in the Cayman Islands as previously advocated by Tony Travers whilst he was in charge of the local friendly association, Cayman Finance Ltd. As I have said for years Joe Public cannot obtain the names of directors of any Cayman company whether it is a hedge fund or a construction company. Why is this? What have these people got to hide?

    In addition the Memorandum and Articles of Association of a company are not open to the public. Hence the public has no idea as to whether a company has powers to do what it’s directors state it can do or otherwise.

    Cayman needs rectify this as a matter of urgency. I cannot believe that I am a voice in the wilderness when the issues are so obvious. Transparency needs to be increased.

    Sensible responses are welcome and I do not care whether the thumbs are up or down.

    • Anonymous says:

      So why is no one in Government taking you up on your well articulated views Mr Johnson? Devious and/ or ignorant politicians? Lazy and/ or incompetent civil servants in Finance? The "if it aint broke don't fix it" mentality which is so common here? Sinister forces in cahoots with tax evasion?

      • Firefly says:

        My understanding is that changes are being made in certain areas that Mr Johnson alluded to and not before time. Transparency in these areas protects the public. We are a major financial centre not Nevis or St. Vincent.