Cayman Islands Financial Services

A progress report on the independent review of offshore financial centres isseud by the United Kingdom has recognized several initiatives of the Cayman Islands and other British OFCs. The report that was led by Michael Foot notes Cayman’s contributions to the economy of the UK.

Leader of Government Business, Kurt Tibbetts said in a statement that the jurisdiction welcomes the progress report and its observations that emphasize the importance of the Cayman Islands financial services industry. He also noted that the report mentions the commitment of the Cayman Islands to upholding international standards and praised the interdependent relationship between the financial services sectors of the United Kingdom and the Cayman Islands. He added, “We look forward to working with Foot and his team to support the completion of this review, expected before the end of 2009.”

The leader of this review Foot and his team visited the jurisdiction on March 16-17, 2009.

On April 6, the Honourable Kurt Tibbetts, Leader of Government Business, delivered a statement to media on the G-20 Summit and the OECD report.

In his statement, Tibbetts said that the Cayman Islands Government is reviewing the proposed measures announced at the summit – particularly the measures related to strengthening financial supervision and regulation as well as resisting protectionism, promoting global trade, promoting investment, and strengthening global financial institutions.

According to Tibbetts, Government will be looking for opportunities of engaging with international standard setters.

As to the OECD progress report, Tibbetts talked on having taken note of Cayman position and he believes that “the Cayman Islands is cast in the “lightest shade of gray” among the financial centres with which it has been listed.

The Cayman Islands Financial Services Association has denounced the OECD’s decision to include the Cayman Islands into its “grey” list despite its obvious commitment to the OECD standard.

The CIFSA has expressed its disappointment to see the Cayman’s inclusion in the OECD grey list as it had previously hoped that “the OECD would undertake a rational objective analysis of the tax transparency established by the Cayman Islands over the past decade”. According to CIFSA’s announcement, “In reverting to its political origins, the OECD has not improved its credibility and indeed in acting in an arbitrary and prejudicial manner raises questions about the value that is attributed by the G20 to the cooperation in tax and criminal matters that the Cayman Islands has demonstrated.”

The CIFSA claimed that the jurisdiction has full and relevant tax transparency not only with the USA under the November 2001 Tax Information Exchange Agreement but also “proactive reporting with 27 European Union nations under the 2005 European Union Savings Tax Directive, the figures for which, not incidentally, show monetarily and fiscally insignificant deposits by European residents in the Cayman Islands”.

The Cayman Islands Financial Services Association stated, “However we are encouraged to see that the OECD has now set an objective test for positioning on the ‘white’ list which is less than the total number of tax exchange arrangements that the Cayman Islands currently has in place. Accordingly, since the Cayman Islands government has throughout maintained its commitment to execution of further bilateral treaties, assuming its approaches are met in good faith, we anticipate that the OECD will be obliged to remove Cayman from its current list swiftly.”

The top management of the Maritime Authority of the Cayman Islands (MACI) has made a visit to France in order to sign an agreement with the French classification society called Bureau Veritas (BV). The official signing took place in Paris.

Head of the Cayman delegation, MACI CEO, Mr A. Joel Walton, said that MACI has
official affiliations with 7 global Class Societies aimed to ensure ability to meet the needs of MACI’s clients on a worldwide basis and to keep Cayman at the forefront of the international maritime safety arena.

The Cayman delegation included also Mr Alfred Powery, Director, Global Commercial Services, Mr Kenrick Ebanks, Director, Global Operations, and Mr Greg Evans, Director, Global Safety and Compliance.

The Cayman Islands government has made an announced that it has in place arrangements providing access to comprehensive tax information assistance with 20 jurisdictions. These 20 countries include the majority of Cayman Islands’ major trading partners.

Japan, Ireland, the Netherlands and South Africa are the countries that have joined 8 other countries afforded tax information assistance under a unilateral mechanism, which does not require a bilateral treaty.

The Cayman Islands also has 8 bilateral tax information agreements, which include recent agreements with the Nordic countries and an existing agreement with the United States signed in 2001.

The Cayman’s tax information exchange network now covers 4 of the 7 G-7 states and 17 of the 30 OECD member states.