Thursday, July 09, 2009

Ditch your confidentiality law, Cayman Islands

We have long been treated to the sight and sound of those in positions of authority in the Cayman Islands claiming that they are not a tax haven (well, they are all at it, aren't they?) - but saner voices do sometimes emerge. This, from Cayman Net News, the more open-minded of the local Cayman publications.

"Yes, Cayman has earned a reputation as a “secrecy jurisdiction”, largely as a result of the Confidential Relationships (Preservation) Law and, as we have pointed out in recent months, this particular piece of legislation has, first, outlived its usefulness and, second, may now be counterproductive to what the country is trying to achieve in terms of its reputation as an international finance centre."

We are delighted to see the newspaper using a term that TJN and its friends have coined and helped popularise - 'secrecy jurisdiction' instead of 'tax haven,' (our term more accurately capturing the kernels of what these places are all about) becoming common currency not only in the responsible jurisdictions but also in the tax havens (ahem, secrecy jurisdictions.)

On the subject of this confidentiality law and much else - we have still not received a reply from Anthony Travers on the challenges we put to him recently. The reply we are looking for should come, we hope, in the form of actions, not words. We hope he and others in Cayman will listen.

The Cayman Islands is clearly worried - the evidence is right here. And it should be. So do as the editorial says - ditch the confidentiality law.

And please don't replace it with a devious, hidden replicate (as the secrecy jurisdictions so often do); don't rely on getting your 12 TIEAs in place as a panacea, shine transparency on the entire murky Cayman trusts business, open up hedge funds and their real beneficial owners to the light of day, push for and institute automatic, multilateral global exchange of information across the board, stop idemnifying company directors against litigation in case of negligence or fraud, and, well, read more here.

Do all this, and you will be well on the way to being a transparent, well regulated and co-operative jurisdiction. It's a lot to ask - but Cayman has already made a number of improvements since the days of the regular drug flights from Miami and planeloads of cash at George Town airport, and Cayman is clearly keen to market itself as a cleaner jurisdiction.

So why not become a leader, not a follower, on transparency?

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