Tuesday, May 31, 2016

Cayman Islands Says They Will Not Show Theirs Until the US Shows Theirs 1st

We previously posted UK lists 40 Countries That Agree to Automatically Exchange of Beneficial Ownership Information where we discussed that the UK government has released a list of jurisdictions it says have committed to its initiative for automatic exchange of beneficial ownership information. The list includes the Cayman Islands, Bermuda and Jersey, but not Guernsey or the British Virgin Islands, though Afghanistan and Nigeria are on the list.

However subsequent to this meeting, The Cayman Islands has indicated that it will not adopt a mechanism for the exchange of beneficial ownership data that is not implemented by the United States. Speaking at a press conference on May 17, 2016, Premier Alden McLaughlin called for a level playing field in terms of financial transparency and stated that a standard without U.S. participation “is not a global standard.”

While acknowledging that the Cayman’s participated in the summit which was predicated on it joining an initiative for the automatic exchange of beneficial ownership data; this initiative of 40 countries aims to develop a global standard for the automatic exchange of beneficial ownership data between law enforcement agencies and tax authorities of the partner countries; however he insisted that it must be done on a 'level playing field', and that Cayman has merely agreed to 'participate in the global discussion that will lead to the development of such a mechanism'.

 A Standard Without US Participation, he said,
'Is Not a Global Standard'.

Even when implemented, it is far from certain that all OECD and G-20 countries are going to adopt it. Although represented at the summit by secretary of state John Kerry, the US advised that it was not in a position to even sign the summit communique, which outlined the steps needed to combat corruption as agreed by attendees.

Cayman Islands’ financial services minister Wayne Panton criticized the hypocritical stance of the US in singling out overseas territories for a lack of transparency.

Referring to a 2008 comment by president Barrack Obama that a single address in the Cayman Islands “supposedly houses 12,000 corporations”, Panton pointed to the US state of Delaware where one address alone reportedly has 285,000 companies registered there.  

The Cayman Islands also announced that it will repeal its Confidential Relationships (Preservation) Law, commonly known as the ‘secrecy law, by September 2016. In addition, the government has passed legislation that completely abolishes the use of bearer shares, which can be used to conceal the identities of beneficial owners. Bearer shares were immobilized in 2000.

Do You Have Undeclared Offshore Income?
All These Information Exchange Agreements
Making You Uncomfortable?
Want to Know if the OVDP Program is Right for You?

Contact the Tax Lawyers at 
Marini& Associates, P.A.  
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Toll Free at 888-8TaxAid (888) 882-9243

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Cayman Islands Government


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