Cayman Islands Financial Services

On June 23, 2009, the Cayman Islands’ government signed a Tax Information Exchange Agreement (TIEA) with Ireland. The ceremony of signing of the document took place at the British Embassy in Berlin.

The Leader of Government Business/Premier Designate and Minister for Financial Services, McKeeva Bush, signed the tax treaty on behalf of the Cayman Islands.

He noted that this marked “another important step towards our ongoing commitment to international cooperation and OECD standards for transparency and exchange of information on tax matters”. He also added that this signing will commemorate the beginning of a highly productive and mutually rewarding relationship between the Cayman Islands and Ireland.

McKeeva Bush said: “Our newly formed ‘negotiation team’ has worked tirelessly to secure technical agreements quickly. Our signing last week of a Double Taxation Agreement with the UK together with today’s signing is a direct result of their commitment and hard work. We look forward to continuing these efforts and I am confident that we will be on the OECD’s white list very soon.”

On behalf of the Irish government, the agreement was signed by Martin Mansergh, Minister of State at the Irish Department of Finance. He said: “We are very pleased to sign a TIEA with the Cayman Islands. It is concrete evidence of the significant progress that has been made in recent months. Ireland welcomes the commitment of the Cayman Islands to implement the OECD standards of transparency and exchange of information in tax matters and their willingness to enter into tax information exchange agreements. The signing of this agreement represents a new chapter in relations between Ireland and the Cayman Islands.”

On June 15, 2009, a new double taxation arrangement (DTA) was signed to facilitate tax information exchange that meets OECD standards. The agreement was signed by W McKeeva Bush, Leader of Government Business in the Cayman Islands, and Stephen Timms, Financial Secretary to the Treasury.

Welcoming the double taxation arrangement, Timms said that information exchange is a vital tool necessary to ensure that governments receive the revenues in order to resource the essential public services. He congratulated the government of the Cayman Islands on “signing up to an arrangement which includes unprecedented provisions for tax information exchange that meet international standards of transparency”.

HMRC Permanent Secretary for Tax, Dave Hartnett, noted that the information exchange provisions in this arrangement meet OECD standards of tax transparency, so tax avoidance and money laundering will be controlled with the help of information exchange.

The Cayman Islands Monetary Authority (CIMA) has become the 189th member of the International Organization of Securities Commissions (IOSCO). IOSCO is the global standard setting body for the regulation of securities markets that aims to encompass cooperation and information exchange, standard setting and surveillance, and mutual assistance.

On June 10, 2009, during the meeting of the Presidents’ Committee at IOSCO’s 34th Annual Conference in Tel Aviv, Israel, the Authority was formally admitted as an ordinary member.

Now, CIMA officially becomes a party to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation, Cooperation and the Exchange of Information. The Multilateral Memorandum of Understanding was signed by CIMA on March 24, 2009, and it is the benchmark for international cooperation among securities regulators.

CIMA’s Managing Director, Cindy Scotland, told the IOSCO President’s Committee that the formal admission of CIMA into IOSCO marked the culmination of a period of mutual engagement, dialogue and action by our two bodies. Accoding to her, it is “a testament to the good faith of both sides in seeing the process through, and is an example of what can be accomplished when international standard setters engage jurisdictions as equal partners with a common objective”.

She added that the move “represents a strong validation by IOSCO of our ability and our willingness to engage other regulators to facilitate cross-border information exchange and assistance.”

CIMA’s Deputy Managing Director – General Counsel, Langston Sibblies, explained that IOSCO membership has significant commercial benefits for the jurisdiction. He said, “Some countries either do not allow investment vehicles from non-IOSCO member countries to be sold in their jurisdictions or will require greatly enhanced due diligence which makes it more difficult to do business with those jurisdictions. IOSCO membership will remove these impediments and open up these markets for Cayman-domiciled securities providers. This is a development our private sector has looked forward to for a long time. It will be welcomed by the private sector.”

The Maritime Authority of the Cayman Islands (MACI), parent organization of the Cayman Islands Shipping Registry (CISR), has recently received news that the CISR has maintained its prestigious “white-listed” status on the Paris Memorandum of Understanding on Port State Control.

In accordance with the MACI’s CEO, Mr A. Joel Walton, Paris is one of the most significant Memorandums of Understanding all over the world, and being on its “White List” means a global recognition to the high standing of the Cayman Islands Shipping Registry.

The Paris Memorandum of Understanding consists of 27 participants – maritime Administrations, including Maritime Authorities of Canada, Russian Federation, Norway, Sweden, Denmark, Finland, Poland, Portugal, Croatia, Cyprus,, Belgium, Bulgaria, Estonia,, France, Germany, Greece, Iceland, Ireland, Italy, Latvia, Lithuania, Malta, Netherlands, Romania, Slovenia, Spain, and the United Kingdom. It covers the waters of the European coastal States and the North Atlantic basin from North America to Europe.

Recently, the top management of the Maritime Authority of the Cayman Islands (MACI) visited Italy in order to sign an agreement with the Italian marine interests classification society entitled Registro Italiano Navale (RINA).

The head of the Cayman delegation was MACI CEO, Mr A. Joel Walton, who said that to effectively expand the Authority’s capabilities on a worldwide basis, they have official affiliations with 7 global Class Societies, thus enabling them to act on behalf of MACI. The Cayman delegation also included Mr Alfred Powery, Director of Global Commercial Services; Mr Kenrick Ebanks, Director of Global Operations; and Mr Greg Evans, Director of Global Safety and Compliance.

The official signing of the agreement took place at RINA headquarters in Genoa, Italy.

During a referendum held on May 20, the Cayman Islands decided to adopt a revised constitution.

According to official results published by the Elections Office Referendum Command Centre, 11 244 voters cast Referendum ballots (including mobile and postal ballots), of which 62.66% voted “yes”, exceeding the 50% +1 required for it to be enacted. Finally, 7045 persons voted “yes”, while 4127 persons rejected the constitution.

The Constitutional Review Secretariat (CRS) Director Suzanne Bothwell commented, “The Constitutional Review Secretariat (CRS) was very pleased with the turn out of voters for the referendum. The turn out was extremely high for such a new initiative for these islands. The country’s mandate has been ‘yes’ for acceptance of the constitution. Work will now begin to prepare for the implementation of the new constitution”.

It should be reminded that the constitutional talks between the Cayman delegates and the UK’s Foreign Commonwealth Office (FCO) started on September 29 and concluded on February 5. As a result, a final draft of the constitution was published on the Cayman Island’s constitution website. At the recent referendum, the text of the constitution was voted.