Cayman Finance published open letter to US business group
Thursday, August 26th, 2010The statement of the US business group, “The Business and Investors against Tax Haven Abuse”, which said that low or no-tax jurisdictions hurt the US economy by encouraging tax evasion, caused quite sharp reaction of Cayman Finance. The Cayman Finance response was published as an open letter in a political news agency in Washington, D.C., and addressed to US Senator Carl Levin endorsing the US business group. Mr. Levin and then-Senator Barack Obama were the authors of the proposed “Stop Tax Haven Abuse” bill.
According to Cayman Finance chairman Anthony Travers, the response detailed CI’s impressive compliance with international regulation and transparency legislation and spells out the country’s full income tax transparency agreement with the U.S.
Mr. Travers said that reports of the IMF and the FATF organizations show full adequacy of Cayman’s anti-money laundering regime, and that jurisdiction’s membership in IOSCO ensured proactive regulator-to-regulator disclosure. He said that the laws cited by the US business group in its claim are US laws, and all Cayman Islands companies are required to operate on the basis of complete tax and anti-money laundering transparency under Cayman law, as well as under existing treaties with the U.S. and many other G20 jurisdictions.
Mr. Travers said that, claiming that low or no-tax jurisdictions hurt the US economy through tax evasion, the business group did not take into account the tax transparency treaties and growing number of reports that suggest that international financial centres such as Cayman are well-regulated and neutral jurisdictions facilitating cross-border business and providing liquidity to international markets by increasing investments.
Also, it was stated in the open letter that the changes in US laws in order to apply US tax extra-territorially to Cayman mutual and hedge funds with US fund managers will lead to their relocation outside the US.