Cayman Islands defends integrity of its offshore financial sector
GEORGE TOWN, Cayman Islands (CMC) — The Cayman Islands, noting that it has had to get used to “unfair and inaccurate” reporting about its global financial sector, is distancing itself from the so-called Paradise Papers, a set of confidential documents related to offshore investment.
In addition, the island has also taken offence to suggestions that Queen Elizabeth was among those using the Caribbean island as a tax haven for hiding wealth and not paying taxes.
“Like other international financial centres, the Cayman Islands has had to get used to unfair and inaccurate reporting about our role in the global financial marketplace,” said Jude Scott, the chief executive officer of Cayman Finance, in a statement in response to reports of an illegal data theft involving the financial information of tens of thousands of people and businesses:
“However, we will not tolerate unfair attacks against our Queen, Elizabeth II, who maintains normal and legal investments in Cayman, a British Overseas Territory, a compliant and transparent jurisdiction that is part of her Dominion.”
The leak compromises 13.4 million files measuring 1.4TB — the second largest-ever data leak after the Panama Papers. About half of the documents — 6.8 million, relate to offshore legal service provider Appleby and corporate services provider Estera — which was part of Appleby until last year.
Another six million documents come from 19 corporate registries, mostly located in the Caribbean.
Bermuda has also dismissed the report with Premier David Burt stoutly defending the reputation of his island.
“The messages that will be shared by me, our partners and stakeholders is that Bermuda’s infrastructure and economy have supported businesses which cover a quarter of the world’s catastrophe insurance claims, helping many of the planet’s most vulnerable people. We have a world-class reputation with a robust regulatory system.
“We share information with law enforcement agencies and we are required to turn around requests for information within 24 hours under agreement with the UK National Crime Agency [NCA]—reflecting the island’s long-held commitment to deterring money-laundering and financial crime. Bermuda also shares this information with Her Majesty’s Revenue and Customs,” Burt told a news conference on Monday.
In his statement, Scott said from investors like Queen Elizabeth to pensioners and university students, a very wide range of people benefit from investments in Cayman.
“Individuals as well as institutions such as government and state pension plans, regular pension funds and university endowments invest together in Cayman funds to access investment opportunities from around the world in a neutral location.
“We are home to funds advised by some of the most talented investment professionals in the world who help those investors increase their returns, which benefit retirees, students, communities and businesses – and on which they pay all relevant taxes in their own jurisdictions.
“ Anyone who is in any doubt as to why such investors use Cayman should read the following summary from AIMA. These legal investments are no different than those that exist in places like London, New York, Frankfurt, Dublin, Luxembourg and Paris and are just as transparently reported to tax authorities.”
Scott said that the Cayman Islands “is a transparent, tax neutral jurisdiction and not a tax haven.
“Our legal, regulatory and legislative regimes clearly show we meet none of the definitions of a tax haven used by the OECD or leading transparency organisations.
“In addition, Cayman maintains a globally responsible tax regime that enables the free flow of trade, services, capital and financing around the world, and does so with transparent stated and actual applied tax rates, cooperation and without engaging in unfair tax practices.”
He said the Cayman Islands has signed agreements which allow tax information exchange with more than 90 countries, automatically shares tax data as part of the European Union Savings Directive, US FATCA and the Common Reporting Standard and has signed onto the country-by-country reporting principles under the BEPS process.
“Cayman investment and pension funds managed by UK managers help support thousands of legitimate and tax paying jobs in the UK financial services industry, an important pillar of the UK economy,” he added.