By Gonzalo Jalles
IT IS NO SURPRISE that the United Kingdom’s Guardian newspaper has once again attacked the Cayman Islands and other Overseas Territories.
What does come as a surprise is when the article is written by a highly respected former editor of The Times and displays a lamentable lack of understanding about recent changes in the offshore world.
I refer to Simon Jenkins’ article, “First, David Cameron should bring his own tax havens to book” (May 22).
Jenkins claims that Cayman is “the worst culprit, has a government accountable to Britain that enforces banking secrecy, levies zero company tax and is consequently home to the biggest money-laundering and tax-evading operation this side of Dubai.”
For a start, Mr Jenkins should do his basic homework. Cayman does not have bank secrecy and has not had for a very long time.
Cayman privacy laws are not significantly different to those of the UK, US or any G20 country.
In regards to money laundering, the Financial Action Task Force is the multinational body that evaluates countries’ performance.
Cayman complies with the same number of recommendations as France and very close to the UK, ahead of many so called on-shore jurisdictions. This information is readily accessible online.
The Cayman Islands Government takes a tough stance on tax evasion by implementing the European Union Saving Tax Directive, the Financial Action Task Force mutual evaluation, the peer review process of the OECD Global Forum on Tax Transparency, and signing over 30 Tax Information Exchange Agreements, some originally signed over 20 years ago.
As was noted in the Guardian on May 2, Chancellor George Osborne revealed that all British Overseas Territories (OTs) with significant financial centres have signed up to the UK Government’s strategy on global tax transparency and indeed the Cayman Islands led the way on this initiative.
This strategy means that overseas territories automatically share information bilaterally with the UK and multilaterally within the G5 and whichever country joins the initiative, and much greater levels of information about bank accounts will be exchanged on a multilateral basis as part of a move towards a new global standard, including the beneficiary of the account even if such account is not in their name.
On March 15, Cayman’s Minister for Financial Services announced our commitment to enter into a FATCA Model 1 Intergovernmental Agreement with the United States for the automatic exchange of tax information, together with a parallel UK agreement adhering to the same timetable.
Since 2005, the Cayman Islands have engaged in automatic exchange of tax information with all European Union Member States for the purposes of the EU Savings Directive.
Cayman is committed to building on this experience by joining the pilot multilateral automatic exchange of tax information, announced recently by the UK, France, Germany, Italy and Spain.
Of course Mr Jenkins and The Guardian (no strangers to tax avoidance) are not the only culprits who are contributing almost daily to this tsunami of misinformation.
To cap it all, Oxfam, who like other UK charities appear to support this unsubstantiated political propaganda, announced in a statement today that world poverty could be eliminated twice over if the Cayman Islands and other tax neutral jurisdictions were obliterated.
Can it possibly have escaped notice that there is a direct link between poverty and non-democratic, corrupt and venal governments?
In the meantime, I fear the Overseas Territories and Crown Dependencies will remain the whipping boys for incompetent, financially illiterate and corrupt governments the world over.
Gonzalo Jalles is the Chief Executive Officer of Cayman Finance.
Note: the opinions expressed in Caribbean Journal Op-Eds are those of the author and do not necessarily reflect the views of the Caribbean Journal.