The Organisation for Economic Co-operation and Development
("OECD") recently published a report in
which the Cayman Islands was commended for the "streamlined,
efficient and responsive procedures it has is in place to
facilitate the exchange of information for tax
purposes". The report further stated that the Cayman
Islands has a "well-developed legal and regulatory
framework" and that "the exchange process is very well
organised with many internal processes in place for handling
exchange of information with high quality responses being provided
to partner jurisdictions."
Marco Martins, Managing Partner of Harneys' Cayman
Islands office, commented that "the recognition by OECD is
further recognition for the high quality of the Cayman Islands as
an international financial centre, and for its longstanding
commitment to adhering to the highest standards of
regulation." This year, 2013, is lining up to be a
pivotal and successful year for the Cayman Islands with many of the
developments which started in the last decade, ranging from
worldwide regulatory and financial consequences of the financial
crisis of 2008 to the ongoing evolution of the international
regulatory framework governing international financial centres, now
culminating in actions taking effect in 2013 and soon thereafter.
"What we see is the Cayman Islands taking the necessary key
steps to maintain its competitive advantage and strengthen its
offering. It has for a number of years been at the forefront of the
global effort to improve standards of governance and as the
alternative investment fund industry continues to grow to serve
ever more critical economic and financial needs of growing
populations, the Cayman Islands investment vehicles is well
positioned to remain the most efficient, effective and trusted
structure."
The Cayman Islands has demonstrated a long-standing commitment to
meeting international best practices and has complied with every
international transparency initiative for the past 30 years. The
jurisdiction has signed 31 tax information exchange agreements,
including one with the United States (since 1990) and its most
recent signing with Brazil, and the 27 European Union member states
under the European Union Savings Directive which has been in effect
since 2004. Further, on 15 March 2013, the Cayman
Islands Ministry for Financial Services released a statement
indicating that an agreement had been reached whereby the Cayman
Islands will implement a Model 1 intergovernmental agreement
("IGA") with the US. This
IGA will ensure compliance with the US's Foreign Account Tax
Compliance Act which requires reporting to the US authorities on
the foreign assets of US citizens.
The OECD's
report on the Cayman Islands was published in 2013 and is part
of the Global Forum's peer review process the object of which
is to provide in-depth monitoring and review of the implementation
of standards of transparency and exchange of information for tax
purposes. Phase 1 reviews are concerned with the quality of a
jurisdiction's legal and regulatory framework while Phase 2
reviews look at the practical implementation of that framework. The
recent Cayman Islands report was a Phase 2 review.
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