John W. Gardner, the former US cabinet secretary, educator and activist once wrote that "Excellence implies striving for the highest standards in every phase of life." Striving for and meeting the highest global standards has been a top priority for the Cayman Islands financial services industry for decades and the success of those efforts was recognised once again late last year.

In September 2017, the Organisation for Economic Co-operation and Development ('OECD')'s Global Forum on Transparency and Exchange of Information for Tax Purposes released the ratings from its second round of peer reviews of individual jurisdictions' development of tax Exchange of Information Regimes (EOIR). The Global Forum peer reviews assessed the Cayman Islands to be "Largely Compliant" with international standards of transparency and exchange of information – the second highest designation and the same one given to Australia, Canada, Germany, Denmark and Bermuda, among others. This is critical recognition of Cayman's status as a transparent jurisdiction.

No other organisation has greater credibility and influence on global transparency standards than the OECD's Global Forum. Established almost a decade ago in response to calls for better implementation of global standards, the Global Forum now includes 147-member jurisdictions including the Cayman Islands. The Global Forum not only works to establish fair, high standards applicable to all jurisdictions, but it also oversees a rigorous peer review process to assess their implementation. Global Forum assessments carry the full weight of their global reach.

The assessment released last year was not the first time Cayman had gone through the peer review process. Between 2010 and 2016, the Global Forum conducted an initial round of reviews to assess adherence to global transparency and tax information exchange standards. As a result of that assessment, the Cayman Islands was also rated as "Largely Compliant." The second round of assessments was launched in 2016 with Cayman being among the first countries to be reviewed and the Global Forum raised the bar substantially for ratings.

As a starting point, second round peer reviews looked at recommendations from the first round to see if they had been implemented. In its first round assessment, the OECD had recommended that Cayman eliminate the use of bearer shares. Subsequently, the Cayman Islands Government passed legislation that outlawed the use of bearer shares which, when combined with Cayman's lack of numbered accounts and lack of shell companies, demonstrated the jurisdiction's commitment to transparency. The peer reviewers in the second round took note. In addition to checking on progress from first round recommendations, second round peer reviews measured jurisdictions against a much higher standard, including greater emphasis on each jurisdiction's beneficial ownership regime. Fortunately, Cayman has devoted more than 15 years to developing a verified beneficial ownership regime that is a world class system.

Unlike most other systems which are self-reporting, the Cayman Islands regime requires information to be collected and verified by licensed Cayman Islands corporate service providers under existing anti-money laundering and know-your-customer regulations. The Global Forum's evaluation of this regime and how closely it is followed played a key role in the jurisdiction's successful rating.

The Global Forum also assessed exchange of information arrangements, how the jurisdiction handled requests under those agreements and information provided both by the Cayman Islands Government as well as other jurisdictions with which we cooperate. Here again, Cayman's long-standing leadership on transparency and cross-border sharing of information made a significant contribution to the successful outcome of the peer review process.

The Cayman Islands has signed Tax Information Exchange Agreements with 36 jurisdictions. Cayman has also adopted the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which allows tax information exchange with more than 90 countries. Cayman became an early adopter of automatic data exchange, signing onto agreements such as the European Union Savings Directive, the OECD's Common Reporting Standard and the US FATCA. Most recently, Cayman signed onto the country-by-country reporting principles under the BEPS process. As the Global Forum's assessment of Cayman shows, the jurisdiction not only has these transparency commitments in place but it is also living up to them. In fact, Cayman actually received "Compliant" ratings – the highest possible - on seven of the ten elements that make up the overall assessment. Cayman's assessment as "Largely Compliant" on the remaining three kept the jurisdiction's rating the same, even though the criteria to achieve such a rating had become even stricter for second round reviews.

The Global Forum's second round peer review results offer independent and highly credible proof that the Cayman Islands is a transparent jurisdiction. Cayman meets none of the definitions for a tax haven used by leading transparency organisations, including the OECD itself. Instead, the Cayman Islands continues to demonstrate the same on-going commitment to global standards for transparency and exchange of tax information as G20 countries like Canada, Australia and Germany. Recognition of that commitment is something of which everyone in the Cayman Islands financial services industry and government can be proud.

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