Cayman Finance Cites Transparency as WikiLeaks Threatens Release of Offshore Account Information

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Jan 18, 2011, 01:57 ET

Cayman Has Longstanding Record of Banking Data-Sharing with U.S. Officials

GEORGE TOWN, Grand Cayman, Jan. 18 2011 /PRNewswire-USNewswire/ -- The anti-secrecy website WikiLeaks recently announced plans to reveal the names of more than 2,000 people with accounts in the Cayman Islands, but the U.S. government won't be gaining any new access to information, according to Cayman Finance.

"This information is of historic interest only. The Cayman Islands have a long and established record of banking transparency and a willingness to share information – not only with the United States and 20 other jurisdictions with which it has tax information exchange agreements, but with all 27 members of the European Union," said Anthony Travers, Chairman of Cayman Finance, the membership-based association representing the Cayman Islands' financial services industry. "Release of the names of persons who maintain accounts in the Cayman Islands – much like other threats from Julian Assange to post information on WikiLeaks – sounds sensational but is yesterday's news."

More than two decades ago, in 1990, Cayman authorities entered into a Mutual Legal Assistance Treaty (MLAT) with the U.S. Department of Justice to enable information-sharing on all crimes and money laundering. In 2001, Cayman signed a bilateral Tax Information Exchange Agreement (TIEA) with the United States that provides for exchange of information relating to the U.S. federal income tax. Since then, it has established similar agreements with 20 other countries.

In 2002, Cayman became one of the first non-OECD jurisdictions to adopt the principles of transparency and exchange of information, requiring local banks, law firms and financial institutions to exercise complete due diligence on all clients. This was in addition to the duty of those institutions to identify suspicious clients and the mandate that every professional confidentially report all suspicious transactions to the government's Financial Reporting Unit (FRU).

These actions collectively have led to Cayman's being placed on the OECD's "white list" of jurisdictions when it comes to transparency and regulations.

A recent story from American Public Media's "Marketplace" highlights the Cayman Islands' transparency: "Gary Hufbauer is with the Peterson Institute for International Economics. He says the Caymans has an agreement with the U.S. Justice Department to 'reveal data on suspicious bank accounts. So anybody who wants to hide money for tax reasons or drug-related reasons, would be pretty ill-advised to use the Cayman Islands.'"

A July 2008 U.S. Government Accountability Office report further validates the legality of Americans' financial activities in the Cayman Islands: "Gaining business advantages, such as facilitating U.S.-foreign transactions or minimizing taxes, are key reasons for U.S. persons' financial activity in the Cayman Islands," the report states. "The Cayman Islands' reputation as a stable, business-friendly regulatory environment also attracts business. This activity is lawful in accordance with domestic legislation, such as when pension funds and other U.S. tax-exempt entities invest in Cayman hedge funds to maximize their investment return by minimizing U.S. taxes."

About Cayman Finance:

Cayman Finance is a private-sector membership-based organisation that has been established to promote Cayman's financial services industry through public relations, public affairs and marketing initiatives. The organisation is chaired by Anthony Travers, OBE.

www.caymanfinance.ky

SOURCE Cayman Finance