Cayman Islands offers to join G5 automatic exchange project

29 April 2013

The Cayman Islands government has offered to join in the G5 countries' pilot project on automatic exchange of bank account information.

The G5 project, announced in early April, is based on the intergovernmental agreements already signed with the US to implement the Foreign Accounts Tax Compliance Act (FATCA). The participants ‒ France, Germany, Italy, Spain and the UK ‒ will collect and exchange bank account information among themselves automatically ‒ as in the FATCA reporting system ‒ and present the results to the European Commission. Other EU member states have also been invited to join in.

However the Cayman government is the first jurisdiction to offer its participation. Cayman Premier Juliana O'Connor-Connolly said it had not been pressured into the move but was doing so willingly. At the same time, the jurisdiction also hoped to gain some credit from the UK government for its previous efforts to achieve transparency ‒ for example, that it has engaged in automatic exchange with EU member states for the purposes of the EU Savings Directive since 2005.

What the Cayman Islands wants is that the UK government gives it a 'fair share of recognition,' said O'Connor-Connolly in a letter to UK Prime Minister David Cameron. Financial Services Minister Rolston Anglin added that in an earlier announcement from the Cayman government, that would implement both the US FATCA measures and a similar arrangement with the UK, had been ignored by the UK press. He said it was important that the UK government make public acknowledgement of that announcement, to counter the repeated criticisms of Cayman in the UK media and by some UK politicians. Cayman, he said, needs to trumpet its achievements.

The industry group Cayman Finance is closely involved in the offer to join the G5 trial. ‘It is of particular importance to note Cayman is the only offshore jurisdiction currently committed to working with the group that will shape the outcome of this initiative,’ said its Chief Executive Gonzalo Jalles.

The jurisdiction is particularly concerned that automatic exchange of clients' bank information is not selectively imposed so that some financial centres obtain a competitive advantage over others. In a telling passage from the Premier's letter, she urges a global mechanism ‘in which all jurisdictions participate’ and thus ‘avoid the risk of multiple competing standards’.

The Caymans Islands also intends to produce an action plan for strengthening of its financial probity regime, including in the area of transparency and beneficial ownership, said O'Connor-Connolly.

 

Sources

 

Cayman News Service

CNS (Premier's letter to David Cameron, PDF file)

Caribbean News

Caribbean Journal

UK Government (G5 letter to European Commission, PDF)

 


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