CAYMAN ISLAND Not A Secrecy Jurisdiction, Says Financial Sector Organisation

FROM THE - CHRONICLES of Monte Friesner – Criminal & Intelligence Analyst and Consulaire for WANTED SA~
~Contributed by Caribbean News~
Published on April 7th 2016

GEORGE TOWN, Cayman Islands -- In the wake of the “Panama Papers” disclosure and global attention on international financial centres (IFCs), Jude Scott, CEO of Cayman Finance, the private sector organisation that represents the Cayman Islands’ financial services industry, emphasised that the British territory is not a “secrecy jurisdiction”.

“Cayman is not a secrecy jurisdiction. We have a clear and strong commitment to transparency,” he said. “The Cayman Islands is a global financial hub that efficiently connects law abiding users and providers of capital and financing around the world - benefitting both developed and developing countries.”

Scott noted that, even though the media coverage makes no mention of the Cayman Islands, the need for a clear understanding of the positive role international financial centres play in the global economy could not be stronger.

“The Cayman Islands benefits onshore jurisdictions by enabling them to be competitive in international trade and in facilitating effective inward investment to help grow those economies,” he said.

Scott said the Cayman Islands financial services industry continues to play a leadership role on international regulatory issues and for setting global standards to fight financial crime.

“Financial crime is a serious global problem that requires a unified legal, social and law enforcement response,” he said. “One of the best weapons against illegal activities and tax evasion is effective transparency and cross border cooperation. This is where the Cayman Islands has a proven track record.”

Scott said the Cayman Islands has in place a robust regime for regulation and cross border cooperation which surpassed many of the world’s top international financial centres. He said the jurisdiction is recognised internationally for its efforts in adhering to, and in some cases exceeding, international regulatory standards.

“The Cayman Islands government, its regulator – the Cayman Islands Monetary Authority, and private industry, have worked continuously over many decades with overseas governments and international authorities to ensure Cayman is a premier international financial centre and a strong partner in combating global financial crime.

“For example, Cayman’s current corporate services provider verified beneficial ownership system is world class in providing for due diligence know-your-customer checks and is superior to the UK’s proposed non-verified, self reporting public registers,” Scott said. “When issues arise, as they do in every jurisdiction, Cayman consistently engages in a proactive and collaborative manner to ensure an appropriate international outcome is reached.”

“With decades of experience in successfully operating a world class international financial centre, the Cayman Islands is positioned as a leader in its ability to contribute positively to the design and development of effective cross border cooperation laws and regulations, and as such, it remains ready and willing to assist other international financial centres, overseas governments and international authorities,” he added.

The Cayman Islands was an early introducer of comprehensive and strict anti-money laundering laws and know-your-customer rules and regulations, well ahead of other IFCs and G20 countries, and continues to lead the way in effective transparency and cross border cooperation:

• The jurisdiction agreed the Mutual Legal Assistance Treaty (MLAT) with the United States in 1986, which was one of the very first in the world and has been proven highly effective in the restraint and forfeiture of the proceeds of crime as well as the repatriation of assets to the United States for restitution to victims of crime.

• In 2001 the Cayman Islands was the first Overseas Territory to sign a Tax information exchange agreement with the United States.

• In 2013 the Cayman Islands was the first Overseas Territory to sign the FATCA Model 1 Intergovernmental Agreement with the USA, complementing a leading number of bilateral tax information exchange agreements with other jurisdictions with a view to tax transparency and cooperation.

• The Cayman Islands has implemented the US FATCA regime so that Cayman financial institutions are obliged to report through the Cayman Tax Information Authority details of financial accounts held by US citizens and residents, and has implemented a similar regime relating to UK residents.

• The Cayman Islands is one of 98 jurisdictions that has committed to implement the OECD Common Reporting Standard (CRS) on reporting and due diligence for financial account information and one of the over 50 jurisdictions that indicated their intention to introduce CRS due diligence from 1 January 2016 (Cayman regulations now in effect ) and reporting from September 2017.

• The Cayman Islands is recognized by the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund and other international bodies as having transparency and standards consistent with those of other major developed countries.

• The Cayman Islands is Financial Action Task Force (FATF) compliant jurisdiction and has accepted the FATF Forty Recommendations on the Prevention of Money Laundering and Nine Special Recommendations on Countering Terrorist Financing. The Cayman Islands is also a member of the Caribbean Financial Action Task Force (CFATF).

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