Archive for March, 2011

Cayman Islands sign TIEA with India

Wednesday, March 23rd, 2011

On March 21, A Tax Information Exchange Agreement (TIEA) that is designed to strengthen the commercial relationship between the Cayman Islands and India was signed by the 2 countries.

This is the 22nd agreement signed by the Cayman Islands. Premier McKeeva Bush said that the government of the Cayman Islands has a strong working relationship with Indian government, so the jurisdiction looks forward to implementing the terms of this TIEA.

On behalf of India, the document was signed by High Commissioner to the Bahamas, the Cayman Islands and Jamaica Mohinder S. Grover. He commented that both the Cayman Islands and India are members of the OECD Global Forum Global Forum on Transparency and Exchange of Information for Tax Purposes, therefore it is important to ensure the effective implementation of the international standards of transparency and exchange of information for tax purposes.

George McCarthy of the Cayman Islands International Tax Cooperation Team said that the TIEA “will provide a common ground upon which the Cayman Islands and India can exercise mutual cooperation and focus on increasing investment funds business in the Cayman Islands”.

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.

Cayman Islands and Turks and Caicos Islands sign Memorandum of Understanding

Friday, March 4th, 2011

A new Memorandum of Understanding (MOU) has been signed by the Cayman Islands with the jurisdiction’s neighbour Turks and Caicos Islands.

The agreement was signed on February 25 to formalize cooperation between the 2 Caribbean authorities, which had been informally occurring otherwise. The document provides for the exchange of information and investigative assistance between the Cayman Islands Monetary Authority (CIMA) and the Turks and Caicos Financial Services Commission (TCI FSC).

The MOU outlines the types of assistance that can be requested and given by CIMA and the TCI FSC including providing, confirming or verifying information; obtaining specified information and documents from other parties; discussing issues of mutual interest; arranging and/or conducting inspections of financial services providers; and permitting representatives of the requesting authority to participate in enquiries by or on behalf of the requested authority.

On behalf of the Turks and Caicos Islands, the MOU was signed by TCI FSC Managing Director, Mr. Kevin Higgins, who welcomed the development: “The FSC looks forward to working more closely with one of the premier regulatory agencies in the Caribbean.”

CIMA’s Managing Director Cindy Scotland said: “We are pleased to formalize methodologies of cooperation that has existed between CIMA and the Turks and Caicos Islands. We see this MOU as reinforcing our strong international cooperation regime and further demonstrating our commitment in this area.”

This Memorandum of Understanding is the 19th signed by the Cayman Islands Monetary Authority (CIMA).