Cayman Islands commended by the OECD in latest peer review report

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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.

Topics:  Alternative Investment Funds, Intergovernmental Agreements, OECD, Peer Review

Published In: Business Organization Updates, Finance & Banking Updates, International Trade Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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