Archive for the ‘Cayman News’ Category

Cayman reviews Cayman and UK relations

Friday, December 9th, 2011

According to a new report entitled United Kingdom and Cayman Islands Relationship Review, the United Kingdom must do more to support the Cayman Islands as well as help dispel myths like “it is an ideal tax haven for terrorists and drug traffickers”.

This report was based on a public consultation with the people of the Cayman Islands. The study revealed that loyalty to the Crown is still strong, however, there is dissatisfaction among the people.

The feedback will be used by the government of the United Kingdom to prepare a new white paper outlining the UK’s strategy for the Overseas Territories.

The biggest concern among Caymanians was the deterioration in relations with the UK. It was said in the report that “The dissatisfaction with the way in which the relationship is presently operating has largely coalesced around the perception that the two parties have often appeared to be at ‘loggerheads’ with one-another and that as a consequence, the Cayman Islands may simply be left to ‘sink or swim”.

“Thus, when the Cayman Islands came under pressure from the international financial community, there seems, amongst several contributors, a sense that the Cayman Islands was let down by a failure on the part of the United Kingdom Government to fully represent the interests of the Cayman Islands and indeed protect these where necessary.”

To remind, the Cayman Islands was criticised as being the second most secretive finance jurisdiction worldwide by a Tax Justice Network (TJN) report in October 2011.

The report highlighted the need to diversify away from the two current main areas of economic activity – tourism and financial services, both of which have come under significant pressure in the wake of the world’s economic recession. According to the United Kingdom and Cayman Islands Relationship Review, “The Cayman Islands needs a long term economic strategy to ensure a stable source of revenue as well as a strategy to diversify away from the two current pillars of economic activity. Also, the report said that the jurisdiction needs a comprehensive long-term strategy to ensure that its tourism and financial services continue to thrive.

FSB praises Cayman Islands for robust regulation

Thursday, December 1st, 2011

The Cayman Islands’ adherence to global regulatory and supervisory standards on international cooperation and information exchange has been found “sufficiently strong” by the Financial Stability Board (FSB). This was revealed in a report commissioned by the G20. It is worth mentioning that “sufficiently strong” is the highest assessment possible.

The FSB, a supranational body whose membership includes the OECD and the Committee on the Global Financial System, suggested that the Cayman Islands is one of 41 jurisdictions that, in the most recent International Monetary Fund-World Bank assessment reports, was determined to be compliant or largely compliant with all, except one, of the relevant cooperation and information exchange standards. As many as 61 jurisdictions were evaluated by the FSB.

According to Premier and Minister for Finance, McKeeva Bush, the FSB’s conclusions on the Cayman regime are a “robust affirmation that the jurisdiction is well-respected, and a good place to conduct business”. He also noted that, in terms of cooperation, the jurisdiction is placed alongside the giant economies of the G7 and G20 countries.

Chairman of the CIMA, George McCarthy, added that the assessment validates the extensive focus placed by the Cayman Islands on international cooperation and involvement in regulatory matters. He said that CIMA has put significant resources to ensure that the offshore jurisdiction meets international standards that relate to all the sectors we supervise.

Cayman announces new tonnage tax regime

Thursday, October 27th, 2011

The Maritime Authority of the Cayman Islands (MACI) is introducing a new Annual Tonnage Fee (ATF) structure, to become effective on January 1, 2012.

With a view to remain competitive with other jurisdictions, a detailed investigation has been carried out by the Maritime Authority of its current ATF system. It particularly focus on comparison with the other key jurisdictions. The net result of this exercise will be a simplified and very competitive structure which provides 2 different formulations, one for merchant vessels and one for pleasure yachts, including those engaged in trade.

According to MACI, the new structure will benefit its clients as well as ensure that the Cayman Islands remain an attractive place for ship registration.

Captive Insurance Market grows in Cayman

Sunday, October 23rd, 2011

A 93%-increase in captive insurance company formations has been reported by the Cayman Islands Monetary Authority (CIMA) during the 1st 9 months of 2011, as compared to the same period in 2010.

CIMA published statistics revealing that a total of 29 captive insurance companies set up operations in the Cayman Islands during 2011, which is an increase from 14 in the 1st 3 quarters of 2010. This growth reflects the continued resilience of captive insurance sector in the Cayman Islands.

Total premiums breached records, which amounted to USD 9.6 billion as at September 30, a 12%-increase on that recorded at the end of 2010. Total assets have grown only marginally since the beginning of the year, to USD 58.3 billion.

According to CIMA’s Managing Director, Cindy Scotland, “This 93% increase in captive formations and close to USD 10 billion in premiums are indicators of the health of our captive insurance industry, despite the generally soft international insurance market conditions. In all of 2010 there were 25 new captives formed, so for our 2011 numbers to already be at 29, and with new applications pending, we anticipate this calendar year to reflect significant growth in new captives.”

It was noted by the statistics that the Cayman Islands has remained the leading jurisdiction for health care captives. As at September 2011, health care was the primary line of business for 256 companies (35%).

Cayman defends itself against secrecy findings

Saturday, October 15th, 2011

It has been discussed that a recent report named the Cayman Islands the world’s 2nd most secretive finance jurisdiction. This has led Cayman industry insider to call for a better defence against “those who would bury places like Cayman”.

The ex-chairman of the Cayman Islands Monetary Authority (CIMA), Tim Ridley has spoken to comment on the publication of the Tax Justice Network ‘s (TJN) Secrecy Index that accused the offshore jurisdiction of making “shallow efforts” in cracking down on fiscal evasion.

Mr Ridley said: “The recent, highly subjective and somewhat ‘short on substance’ secrecy report by the Tax Justice Network underscores how essential it is that Cayman presents the accurate position whenever and wherever possible and to those that matter”. He stated that “those who would bury places like Cayman are in deadly earnest”, so the future of Cayman financial services industry is at stake.

Carlos de Serpa Pimentel, chairman of STEP Cayman Islands, suggested that the Cayman Island’s dealings as an offshore jurisidiction actually helped the world’s economy by providing a tax neutral platform for international transactions. “In other words, the existence of Cayman facilitates the workings of the world’s financial system and makes it more efficient,” he said.

British tax activists accuse Cayman of being best tax haven

Sunday, October 9th, 2011

According to British newspaper Morning Star, tax activists drew their attention to the Cayman Islands. They demanded that Britain bring the jurisdiction, which they called one of the world’s biggest tax havens, to account.

The Tax Justice Network’s financial secrecy index said that the Cayman Islands is one of the world’s most secretive financial centres. The jurisdiction is one of British Overseas Territories having economic autonomy. According to Morning Star, income or corporate taxes has made them the hedge fund capital of the world, with more than 90 000 companies doing their business through this offshore jurisdiction. A study of 72 countries revealed that the Cayman Islands is the 2nd most secretive nation (the 1st is Switzerland).

On October 4, a separate report was released that accused the offshore jurisdiction of playing a “key role” in the 2008 global financial crisis. The report said: “Cayman’s relaxed funds law served as the bedrock of the hedge fund industry which now sees Cayman as its top domicile. It also saw Cayman attract a very large share of major new sectors in financial engineering such as private equity, debt and bond issues and securitisation”.

In February 2011, Barclays admitted to using Cayman subsidiaries to slash its tax bill to 1%. Barclays chief executive Bob Diamond said that the bank had used at least 181 offshore subsidiaries in the Cayman Islands to cull its tax burden to just GBP 113 million despite racking up GBP 11.6 billion in annual profits.

Cayman governor rejects visa-waiver proposal for Jamaicans

Saturday, October 1st, 2011

A request from the government for an across the board visa waiver for Jamaicans coming to the jurisdiction has been rejected by Governor Duncan Taylor.

According to a statement issued by the Office of the Governor, Cabinet had considered a proposal to ease the visa requirements for Jamaican nationals with a view to make it easier for children and the elderly to enter the Cayman Islands. The proposal could also foster business visitor travel from Jamaica. The government had recommended to remove the existing requirement to obtain a visitor’s visa for Jamaicans wishing to visit the Cayman Islands who are under the age of 15 years or over the age of 70 years or in possession of a valid Canadian, UK or US visa.

The statement said that the Governor was content on the first 2 points, however, he did not agree to the visa requirement being waived across the board for those Jamaican citizens holding valid Canadian, UK or US visas. He said: “I know that the vast majority of Jamaicans are law-abiding citizens. This includes residents who make a positive contribution to our society and economy in the Cayman Islands; and short-term visitors, including business visitors, whose visits are welcome and trouble free. There is, unfortunately, a small minority who has the potential to cause problems”. Taylor noted: “The Cayman Islands Immigration Department does not have the capability to determine whether such a visa is genuine or not and the respective countries have indicated that they are unable to provide the Cayman Islands with the access to the resources on which they rely to make these determinations.”

Taylor said that the introduction of a visa regime for Jamaicans in 2005 led directly to a significant reduction in the involvement of Jamaicans in crime in Cayman. He added: “Lifting the visa requirement as proposed could potentially allow unscrupulous Jamaican visitors to gain entry to the Islands using forged or counterfeit visas which could have a significant negative impact on the security of the Cayman Islands”.

Temporary Pension Holiday Ends in Cayman

Monday, April 25th, 2011

The Cayman Islands’ temporary 1-year pension contribution suspension is to end, which is to affect private sector both employers and employees, as well as self-employed individuals.

In April, 2010, this measure was introduced with an amendment to the National Pensions Law. The measure was to provide a temporary 1-year suspension of pension contributions and a temporary 2-year suspension period for non-nationals. According to the government of the Cayman Islands, it was implemented in response to the global economic recession. It was aimed at easing people’s financial burdens and stimulating the economy.

Recently, the Cayman government has issued a reminder that, as of April 26, Caymanians from their first day of employment are pensionable immediately, required to participate in a pension plan and pay pension contributions.

Rolston Anglin, the minister responsible for pensions, commented: “These contributions are extremely important to continue each employee’s long-term savings for retirement. It’s a critical part of their retirement planning”.

US concerned about Money Laundering and Financial Crimes in Cayman Islands

Friday, March 11th, 2011

A number of Caribbean jurisdictions have been assailed by the United States for their alleged continued facilitation of money laundering and financial crimes.

In the 2nd part of the 2011 International Narcotics Control Strategy Report (INCSR), the State Department was particularly concerned about efforts made by several offshore jurisdictions in addressing these crimes. One of the jurisdictions under concerns was the Cayman Islands.

The report said that most money laundering in the Cayman Islands is primarily related to fraud and drug trafficking. The State Department suggests that, due to its status as a zero-tax regime, the Cayman Islands is considered attractive to those who intend to evade taxes in their home jurisdiction.

The report said: “While the country has increased both its regulatory and law enforcement staffing, the number of prosecutions and convictions is extremely low, given the vast scale of the country’s financial sector”. It also stated that only 6 successful prosecutions for money laundering and only 1 in the last 4 years have taken place.

According to the INCSR, the lack of penalties for failing to report information on ownership and identity undermines the effectiveness of the obligations. “This is a problem in particular for an estimated 3,000 unregulated mutual funds resident in the Cayman Islands”. The report added that there are no requirements for companies, trusts and partnerships to retain records for at least 5 years.

The 2nd part of the 2011 International Narcotics Control Strategy Report urged the Cayman Islands to continue computerising various registrations, particularly those for mutual funds, as it is necessary to pay more attention to the risks and proper supervision of non-profit organisations.

The report also expressed such concerns about not enough control of money laundering and financial crime in Belize, the BVI, the Bahamas, and Antigua and Barbuda.

Interim Chairman appointed by Cayman Finance

Tuesday, February 22nd, 2011

To replace the outgoing Chairman Anthony Travers, Cayman Finance has appointed an Interim Chairman Roy McTaggart. The decision has immediate effect.

Anthony Travers recently resignated after serving 2 years as Chairman.

Roy McTaggart is the Managing Partner at KPMG Cayman and has over 25 years’ experience in providing assurance services to the hedge fund, captive insurance and offshore banking industries. He acts as the Risk Management Partner with the responsibility for the professional risk management process for the Cayman and BVI offices. McTaggart is a member of the Florida and American Institutes of Certified Public Accountants; council member of the Cayman Islands Society of Professional Accountants; and a member of the Financial Services Council, an advisory group to the Cayman Islands government.

McTaggart welcomed his appointment, saying: “I am pleased to accept this role which will provide continuity of service whilst a permanent appointment is made. We are working with the Financial Services Commission and with the Cayman Islands Monetary Authority to help ensure that there is an articulate and sophisticated understanding of Cayman’s positive role in international finance.”