Premier Hon. Alden McLaughlin said the number one challenge facing the country’s financial services industry is protecting its existing business. In the wake of a new report from a tax advocacy group naming Cayman the world’s 3rd most secretive jurisdiction, he and other government leaders are going on the offensive.
“We continue to be wrongly attacked by NGO’s such as the tax justice network,” said Mr.McLaughlin Thursday (1 February) at the 2018 Fidelity CEO conference at the Kimpton Seafire Resort.
The Premier hit back at the tax advocacy group’s recently published ‘Financial Secrecy Index’. In it, Cayman ranks 3rd in secrecy behind Switzerland and the United States.
“Yet China is ranked 28 and Russia 29th,” quipped Mr. McLaughlin to a room full of laughter. “Really? Go figure. Surely no report with these rankings can be credible.”
The Premier was hardly alone in his criticism of the report. Financial Services Minister Hon.Tara Rivers pointed out issues with the report’s methodology.
“The fact that they use their own definition of secrecy, which is by their own admission not in keeping with what is considered international standards or global standards in itself, leads to the lack of credibility that should be attributed to this particular report,” said Ms. Rivers.
“For many years the Cayman Islands has had to contend with the Hollywood image of the jurisdiction of numbered bank accounts and bank secrecy,” said Mr. McLaughlin.
Mr. Mclaughlin said this image makes Cayman an easy scapegoat for some, despite the jurisdiction’s 30-plus tax treaties, as well as its participation in the UK and US FATCA among other automatic tax information exchanges.
“A lot of it may just be based on false information and misconception as to what the true and real situation is,” said Finance Minister Hon. Roy McTaggart. “Engage with them, give them all the information that they need to promote and to show our side of the story rather than simply just sitting back and letting our detractors effectively mold what Cayman and other offshore centers are.”
The Tax Justice Network website says it does not use so-called ‘accepted international standards’ as benchmarks, as it says it sets a higher bar. To all countries upset about their inclusion in its rankings: it says tough luck.