After a rigorous three-year process, in July the Cayman Islands emerged with a clear understanding on the Organisation for Co-operation and Development’s (OECD’s) Harmful Tax Competition initiative, its zero tax regime intact, and its money laundering legislation tweaked by the Financial Action Task Force (FATF) to spectacular levels of probity requiring the application of Know Your Client due diligence to UK standards.
In the light of this, two often repeated myths should have been laid to rest firmly. As to ‘bank secrecy’, the accord reached with the OECD ensured that there would be tax transparency with regard to criminal tax matters in the first tax year following 31 December, 2003 and with regard to civil matters, in the first tax year following 31 December, 2005 pursuant to bilateral treaties to be negotiated on a country-by-country basis.
