Cayman has formally requested to be included in the OECD Model Convention — quite an old document that has regained momentum in recent months given the financial difficulties in which most countries find themselves.

From a Cayman perspective there would be little benefit to attempt to engage in a debate on the merits of this initiative.  The fact is over 50 countries, including most of the jurisdictions from where our business comes, have already subscribed to it.  Refusing to participate in globally-accepted standards can quickly isolate us, jeopardizing our ability to participate in the global capital markets in which we continue to facilitate international capital flows.  We have seen the consequences of falling behind and being included in certain lists, and for that fact alone, we support Government's decision.

The Convention's key point is the expansion of an automatic exchange of information system much like the one imposed by the US through FATCA.  This system will mean the financial information of accounts held in Cayman will be shared with the appropriate countries.  While this system will be very expensive, it won't be more expensive for Cayman than for other countries; and therefore, it won't damage our competitive position.  However, it will provide an invaluable benefit to Cayman.  It should be a very powerful tool to respond to the accusations represented by misinformed Hollywood productions.  A system that will put behind the impression of Cayman providing a hiding place for tax evasion and, as our industry continues to succeed, will allow us to demonstrate the value and legitimacy of our business model.

Signing  the convention and the future implementation of the core and relevant points in it through future bilateral tax treaties, is a step in the right direction; however, it is unlikely in itself to eliminate the hypocrisy with which many individuals and organizations refer to places like Cayman.  It will take continued work to promote our story, and the effective implementation of these systems will be a key tool in our box.

Examples of this hypocrisy are found way too often.  We are going to cite just a few in case the reader remains in doubt.

The World Bank's private sector arm invested about £2B through centres such as the Cayman Islands, Mauritius, Guernsey, and Jersey, saying many projects would not be sufficiently economically viable to attract capital investment without the use of these intermediaries.

Jason Sharman, a PhD from Australia, has conducted an empirical study attempting to create secret companies and transfer funds anonymously.  The results: in general, industrialized countries provide a higher level of corporate secrecy than is available in offshore centres, and Cayman, in particular, received good results.

According to a recent analysis by the World Bank, the US, Switzerland, and Britain topped the rankings of corporate bank accounts involved in corruption cases; nevertheless, Britain's offshore centres are under pressure to become more transparent and regulated.

And of course this post cannot be finished without mentioning the biggest hypocrisy of all — Delaware.  While the President of the US continues to try to divert attention and finds himself repeatedly surrounded by appointees who had or have investments in Cayman in a legal and transparent manner, Delaware continues to provide probably the best option to set up a corporation without proper disclosure of beneficial ownership — something that is a long established requirement in Cayman.

1209 North Orange Street, a 2-story building that says nothing from the outside, is the legal address for 285,000 separate companies, dwarfing any of the examples the President choses to use on his political diversion strategies.  These buildings house companies owned by Ponzi scheme runners and international convicted smugglers as well as 60% of the S&P 500 corporations.

Even the Tax Justice network, with whom we tend to disagree, ranked the US number one as a secrecy jurisdiction, with London placed on the top five before later changing their methodology in a questionable manner.

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