The Organisation for Economic Cooperation and Development ("OECD") at the G-20 Summit in April this year developed a three-tiered classification for offshore financial centres according to an internationally agreed standard. An offshore financial centre may be classified as 'white', 'grey' or 'black' based on the number of Tax Information Exchange Agreements ("TIEA"s) entered into. A classification of 'white', the highest distinction denoting substantially implemented agreed tax standards, requires an offshore financial centre to have entered into a minimum of 12 TIEAs.

TIEAs are bilateral agreements which commit to the exchange of information in criminal or civil tax investigations. As legal instruments developed by the OECD Global Forum Working Group, TIEAs represent the 'golden standard' for effective exchange of information to address harmful tax standards.

Ogier provides legal and fiduciary services in the key offshore financial centres of Guernsey, Jersey, the Cayman Islands and the British Virgin Islands. Of these jurisdictions, Guernsey and Jersey are currently listed in the 'white' category, while the Cayman Islands and the British Virgin Islands both signed their 12th TIEAs with New Zealand on 13 August 2009 in Washington D.C. satisfying the requirements for re-classification in the 'white' category.

The TIEA between the Cayman Islands and New Zealand will be packaged with the existing 11 TIEAs and presented at the OECD Global Tax Forum in Los Cabos, Mexico in September. The Cayman Islands would then ascend from its status of 'grey' with unsubstantial implementation of internationally agreed tax standards to 'white' with substantial implementation.

In addition to these 12 'bilateral' TIEAs, the Cayman Islands also has committed to additional 'unilateral' TIEAs with countries including Austria, Belgium, the Czech Republic, Germany, Japan, Luxembourg, Slovakia, South Africa and Switzerland. All in all, this brings the count of total TIEAs to 21 recognising the Cayman Islands commitment to securing the highest implementation of agreed international tax standards for information exchange and cooperation.

In the British Virgin Islands the Premier and Minister of Finance Hon. O'Neal said the conclusion of its 12th TIEA with New Zealand demonstrates the commitment of both the British Virgin Islands and New Zealand governments to the OECD principles of transparency and effective exchange of information. In addition to its 12 TIEAs, the British Virgin Islands have also committed to mutual agreement procedures and agreements for the avoidance of double taxation for enterprises, operating ships or aircraft and also in respect to individuals.

These key developments in the Cayman Islands and the British Virgin Islands reflects the dedication of the two jurisdictions as globally integrated offshore financial centres to the general principles of transparency and their commitment to foster and develop international best practice in all areas of financial regulation.

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