Archive for May, 2009

CISR white-listed under Tokyo Memorandum of Understanding

Thursday, May 28th, 2009

The George Town headquarters of the Maritime Authority of the Cayman Islands (MACI), parent organization of the Cayman Islands Shipping Registry (CISR), and its European Regional Office in Southampton, UK, recently exchanged congratulations on the announcement of the “White List” status of Cayman Islands Shipping Registry (CISR). The CISR attained it under the Tokyo Memorandum of Understanding on Port State Control.

18 countries have signed the above-mentioned Memorandum of Understanding. These include Japan, China, Australia, New Zealand, Russia, Canada, Chile, and Republic of Korea.

It should be noted that previously the CISR was on the “Grey List”, and therefore it had worked hard with a view to achieve the top ranking.

The MACI’s CEO, Mr. A. Joel Walton, said that this was one of the most important Memoranda of Understanding internationally, and noted that it brings further recognition to the high standing of the Cayman Islands Shipping Registry.

Cayman Islands Shipping Registry moves Mediterranean Office to Monaco

Friday, May 22nd, 2009

The Cayman Islands Shipping Registry (CISR), a division of the Maritime Authority of the Cayman Islands (MACI), has recently announced that the relocation of its Mediterranean representation to the Principality of Monaco. The relocation is already effective (from May 1).

According to CEO (Designate) of the MACI and Director of CISR, Joel Walton, expansion over the past 2 years has been significant to the Shipping Registry. He said, “In order to strategically place ourselves for the convenience of our clients, we opened our first representative Mediterranean office in Cannes and it was very well received. However, in order to expand our services, we decided to move our representation to Monaco, where we have a large client base, once accommodation and representation services there could be secured”.

The promotional launch held in May provided an opportunity for the CISR to introduce its new Mediterranean technical representative, Mr Eduard Henny, Consultant Surveyor.

It is worth reminding that, besides Monaco, the Cayman Islands Shipping Registry has representation in 8 locations: George Town in the Cayman Islands; European Regional Office in Southampton, UK; London, UK; Singapore; Hong Kong; Tokyo; Athens; and Ft. Lauderdale.

Person charged with Fraud in Cayman

Saturday, May 16th, 2009

As part of an ongoing investigation carried out by the Financial Crime Unit, a man has been charged with fraud offences.

A 48-year-old Robert Christopher Tom Girvan has been charged with 3 counts of fraud offences – forgery, obtaining a money transfer by means of deceiving and providing a false document.

The above-mentioned charges have been made by detectives investigating the collapse of the Grand Island Fund. As investigations are still ongoing into the matter, detectives are waiting for information on the matter.

Obama provides Tax Broadside for Cayman and other Low-Tax Jurisdictions

Tuesday, May 12th, 2009

Lately, American business groups have been critical of President Obama’s proposals to subdue tax advantages for those who invest overseas. As a result of the reforms, the low-tax jurisdictions like the Cayman Islands could suffer. Still, it is difficult to fully assess the possible effect of the reforms.

On May 4, the Treasury published a statement, according to which US multinational corporations paid about USD 16 billion of US tax on approximately USD 700 billion of foreign active earnings in 2004 for an effective tax rate of about 2.3%. (2004 is the most recent year with the available data). According to the Treasury’s statement, about 1/3 of all foreign profits reported by United States’ corporations in 2003 came from 3 small, low-tax countries – Bermuda, the Netherlands, and Ireland. The US Treasury said that “there is no higher economic priority for President Obama than creating new, well-paying jobs in the United States”, however “tax code actually provides a competitive advantage to companies that invest and create jobs overseas compared to those that invest and create those same jobs in the US.”

It is worth noting that the Cayman Islands does not expect that it could be unduly impacted by the proposed changes announced by the US Treasury because the number of US corporations that have subsidiaries in the jurisdiction and that have benefited from the deferral rule is insignificant. So, the Cayman Islands Financial Services Association (CIFSA) doubts that there will be any material adverse effect to the Cayman financial industry. According to a CIFSA representative, “Having a registered office address in the Cayman Islands is driven by commercial considerations, not by tax avoidance. It allows companies to raise capital and conduct global business”.

CIFSA writes a letter to President Obama

Thursday, May 7th, 2009

On May 5, 2009, the Cayman Islands Financial Services Association (CIFSA) issued an open letter to US President Barack Obama.

CIFSA’s letter was as follows:

We are pleased with your announcement that the United States intends to restore balance and fairness to its global tax policy. We agree with your focus on preventing tax fraud and evasion; ensuring that every corporation pays its fair and lawful share is important. We stand with you in favoring effective prevention of tax fraud and evasion and maximum transparency between tax jurisdictions, including the Cayman Islands.

We are, however, gravely concerned about your remarks regarding the Cayman Islands, which erroneously suggest that the subsidiaries of U.S. corporations operating in Cayman are engaging in tax fraud merely because they are registered to do business here. Nothing could be further from the truth.

We believe that Cayman-based corporate subsidiaries operate legally and transparently and are aware of no information to the contrary. The Cayman Islands has a low tax rate, just as do Ireland and other jurisdictions. That is not a bad thing; it certainly is not the basis upon which to suggest illegality in the form of tax evasion.

Tax deferral arises, as you know, from current provisions of U.S. tax law that were designed to provide a competitive advantage to American companies in global trade. But this is not fraud, evasion or artificial avoidance. Historically, deferral has been used by some U.S. companies to boost the capital they have available for reinvestment, expansion and job creation. We fully recognize that the issue of tax deferral is a matter for the U.S. Government to determine, and we state no view on that subject.

We do feel compelled to note that, for over 20 years, the Cayman Islands has been a model of cooperation with the United States and, indeed, the world. We have worked cooperatively on every international initiative from the United States, the IMF, the OECD and the FATF to create a financial regulatory structure that is robust, accountable, transparent and fair. We take our obligations in this regard very seriously. Notably, there has not been a single bank failure in the Cayman Islands during this financial crisis and none of the financial recklessness that has brought about much of the current global crisis occurred in or involved the Cayman Islands. Rather, to the contrary, the investments which flow from the 12,000 companies involved with the United States have provided trillions of dollars of international investment to U.S. financial institutions at a critical period, and have done so in a fully transparent manner.

Specifically, since 2005, the Cayman Islands has had a fully informative tax information exchange arrangement under the European Union Savings Directive (EUSD) with all 27 European countries. In 1990, Cayman entered into a fully transparent all crimes Mutual Legal Assistance Treaty with the U.S. and, in 2001, a comprehensive U.S. Tax Information Exchange Agreement. We are actively pursuing additional information sharing agreements with additional jurisdictions. We are eager to work with your Administration to take further steps as necessary to promote transparency and tax law compliance.

Moving forward, we hope you will provide us the opportunity to provide you and your Administration a fuller description of the efforts the Cayman financial industry has taken to promote transparency and accountability. We are confident that this will enable you to share our conclusion that U.S. citizens do not use the Cayman Islands to evade tax.

Mr. President, we share your concern that the global financial markets work transparently, safely and to the benefit of all participants. We look forward, as we always have, to working with you toward this goal.