The Cayman Islands has indicated to the UK government that it is committed to joining the G5 pilot, recently announced by the UK, France, Germany, Italy and Spain, on multilateral automatic exchange of tax information.
This decision follows a statement made by Cayman’s Deputy Premier, who also is the country’s Minister for Financial Services, in the Cayman Islands Legislative Assembly on 15 March. The statement, announcing Cayman's commitment to pursue a Model 1 IGA approach to FATCA with the US and UK, recognised the shift to the new global standard of automatic exchange.
By joining the G5 pilot, Cayman is continuing its global commitment on the exchange of information for tax purposes. In the European Union, Cayman has been engaged in automatic exchange with EU Member States, for the purposes of the EU Savings Directive, since 2005.
Cayman's interest in joining the pilot was communicated to UK Prime Minister David Cameron in a 25 April letter from Cayman's Premier, Juliana O'Connor-Connolly (pictured).
Regarding the pilot, she wrote: “We welcome these efforts to promote an effective global mechanism for automatic exchange of information for tax purposes, in which all jurisdictions participate and where a common approach will not only ensure efficiencies of cost and resources, but will also avoid the risk of multiple competing standards.
“Accordingly, we would call on other jurisdictions to commit to this initiative, which will take us to a new level of tax transparency and remove hiding places for those who would seek to evade tax and dodge their responsibilities.”
Also in her letter O’Connor-Connolly told the Prime Minister that, in line with the revised Financial Action Task Force recommendations and the recently issued methodology for assessing compliance with its standards and effectiveness, the Cayman Islands is committed to reviewing its legal and regulatory framework, including conducting a national threat assessment.
“The Cayman Islands has always taken a leading role in the fight against money laundering, terrorist financing and all forms of financial crime, as is evidenced by (our) consistent compliance with the standards,” she wrote.
She further noted that Cayman is “committed and determined to remain at the forefront of jurisdictions in respect of information and enforcement of standards”, such as those on availability of beneficial ownership information. Cayman will produce an action plan for the strengthening of its anti-money laundering regime.
For more than a decade, Cayman has been actively involved in the OECD’s work on standards for the exchange of information for tax purposes. In 2000 it made an advance commitment to the international standards, and today it sits as a member of both the Steering Group and the Peer Review Group (PRG) of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Cayman also has contributed significantly to the Global Forum’s work by providing assessors for peer reviews, hosting a PRG meeting in Grand Cayman in 2011, and providing training at Global Forum seminars.
Cayman’s commitment to the pilot multilateral automatic exchange of tax information, as well as to reviewing its legal and regulatory framework, follows months of discussions between its government and UK officials, in particular HM Treasury. These discussions were initiated by Cayman’s Ministry for Financial Services, after the UK announced it would seek similar automatic exchange of information arrangements as those made by its OT's for US FATCA.
Ministry officials are now concluding a visit to London this week that centred on discussions regarding US and UK FATCA with HM Treasury and HM Revenue and Customs. During the visit, Ministry officials also took the opportunity to discuss the UK's G8 agenda with UK government officials.