Archive for August, 2008

Gustav to threaten the Caymans Islands

Saturday, August 30th, 2008

Deadly hurricane Gustav following swamping Jamaica threatens to menace the Cayman Islands. This was what forecasters said on August 29, on the anniversary of Hurricane Katrina’s landfall.

The hurricane has already left large damage to Jamaica – Gustav ripped off roofs, broke power lines and pounded rain that triggered landslides and floods into Jamaica.

The hurricane center said that the storm was centered 265 km east-southeast of Grand Cayman and that it was moving over water toward the west-northwest near 13 kph.

According to forecasters, if winds sustain about 100 kph and higher gusts, Gustav could strengthen back into a hurricane and slam into the Cayman Islands.

Caribbean Investment Plans announced by C&W

Tuesday, August 26th, 2008

Richard Dodd, the Chief Executive Officer of Cable & Wireless in the Caribbean, has recently announced that the company with principal operations in the Channel Islands, the Caribbean, Panama, Macau, and Monaco plans to invest more than USD 400 million in Caribbean telecommunications development over the next 3 years.

The announcement followed positive company results published in May 2008. The results revealed that revenues for Cable & Wireless International had increased by 6% year on year to GBP 1.2 billion.

According to Dodd, Cable & Wireless is repositioning itself for an era of competition, it “intends to be around long into the future to bring the customers the superior brand of telecommunications products and services that has helped to put the Caribbean ahead of many countries in telecommunications infrastructure”.

Cayman registers more than 10 000 Hedge Funds

Friday, August 22nd, 2008

According to recent 2nd quarter figures from the Cayman Islands Monetary Authority (CIMA), the achievement of a key milestone by Cayman financial services industry have been confirmed as more than 10 000 investment funds currently registered in the Cayman Islands.

At the end of June 2008 10 037 funds were registered in the jurisdiction. This figure can be compared with 9 681 at the end of the previous quarter and 8 972 at the mid point of 2007.

The current annual growth rate of 12% in net new hedge funds is seen as striking in the context of the deterioration in world’s markets after the sub-prime meltdown and associated credit crunch.

Mark Lewis, senior investment funds partner at Walkers, said that the 10 000 barrier has been reached as hedge funds continue to be registered in Cayman that remains the jurisdiction of choice for investment managers and their advisers all over the world.

Cayman Government accepts Commission’s Recommendations

Sunday, August 17th, 2008

On August 6, 2008, a statement was published, in which Governor of the Cayman Islands, Stuart Jack provided a response to the findings on governance that were recently unveiled by the Commission of Enquiry.

According to Mr Jack, the Cayman Islands can boast of generally good standards of governance as compared with many other jurisdictions. However, he noted that there is always room for improvement. That regards the delays over government accounts that were described in the recent report of the Auditor General.

He reported that Cabinet has looked at the recommendations made by the Commission of Enquiry and has accepted 5 out of the 7. The recommendations that were accepted by the Cabinet were the following:

1.MLAs, including Ministers, should not serve as directors of statutory authorities or government companies; and civil servants only in a non-voting role. Relevant laws and articles of association will be amended to enshrine what is already the policy of the present Government;
2.directors of statutory authorities and government companies should have clear written duties. Relevant laws and articles of association should be created to provide for this;
3.clear guidance should be given to directors and civil servants as to the status of, and their duties in respect of, documents. This should be included in the above written duties and in the Code of Conduct for civil servants;
4.the FOI Unit should issue guidance on handling of confidential records, including “personal files”;
5.an amendment should be considered to the Public Service Management Law to make it compatible with the Freedom of Information Law in respect of whistle-blowers.

Mr Jack concluded that the changes will be made to laws and regulations to provide greater clarity and certainty.

Tibbetts responds to US GAO Report on offshore companies in Cayman

Wednesday, August 13th, 2008

Previously, it has been discussed that the US Government Accountability Office (GAO) reported its investigation regarding the Ugland House to the US Senate and the findings regarded Cayman-registered companies.

Following this news, in a Cabinet press briefing in the end of July, Kurt Tibbetts, the Leader of Government Business in the Cayman Islands, responded to the publication by the GAO of the above-mentioned report that investigated why so many US companies have registered companies in the Cayman Islands as well as in other offshore jurisdictions.

The report entitled “Cayman Islands: Business and Tax Advantages Attract US Persons and Enforcement Challenges Exist” published by the GAO was examined at a Senate Finance Committee hearing and Tibbetts commented that the Cayman Islands Government has been in dialogue with the GAO since August 2007, “regarding a review that the GAO was asked to undertake by the US Senate Finance Committee of aspects of the Cayman Islands’ financial services sector relative to the US-source business.” He said that the GAO has no regulatory powers and no law enforcement, accordingly it has no access to “information at the level of detail afforded under the various international cooperation channels that exist between the Cayman Islands and the US”. The GAO met in Cayman with representatives from the Cayman Islands Government in March 2008 and got information for the report. So, Tibetts said: “We believe that the report generally presents an accurate description of the Cayman Islands’ legal and regulatory regime and also assists in clarifying the nature of activity that takes place in the Cayman Islands in its role as a global financial services centre, to the benefit of both US and non-US persons.”

Cayman Companies come under US Senate Spotlight

Saturday, August 9th, 2008

On July 24, 2008, another the United States Senate hearing took place. Following the hearing, the US Congress intensified its attention to offshore finance.

The hearing discussed why so many US companies have established entities in the Cayman Islands and other offshore jurisdictions. The discussion of the issue led to proposals to introduce requirements of stricter reporting rules for tax purposes.

At the hearing, the findings of a Government Accountability Office (GAO) investigation of the Ugland House were introduced. The Ugland House is home to a legal firm in Cayman that has nearly 19 000 registered companies, approximately half of these Cayman-incorporated companies are American.

It was proposed as one one solution that it might be required that financial firms file information reports to the Internal Revenue Service (IRS) when facilitating transfers of customer funds offshore. This is aimed to enable the IRS to better track tax evaders by means of matching the report with filed returns.

Cayman Hedge Fund Investigation leads to arrest

Monday, August 4th, 2008

The Cayman Islands Police have made an arrest connected with the recent collapse of several hedge funds registered in this offshore jurisdiction.

In the end of July, a 47-year-old man was arrested by detectives from the Financial Crimes Unit (FCU) of the Royal Cayman Islands Police Service (RCIPS) on suspicion of theft, false accounting and uttering false documents in relation to the Grand Island Funds that recently were placed into voluntary liquidation by the shareholders of the funds.

It has already been discussed and should be reminded that in a statement made on June 25, 2008 the Cayman Islands Monetary Authority (CIMA) confirmed that 3 CIMA-registered investment funds and a 4th fund, not regulated by CIMA, have been placed into voluntary liquidation. In the statement, CIMA announced that it is holding its own investigation into the issue.