Tax Agreement with the U.S.
Published 27th November 2001, 4:36pm
GRAND CAYMAN, Cayman Islands, Nov. 27 – The United Kingdom Government, on behalf of the Cayman Islands, concluded a tax information exchange agreement with the United States today in Washington. The document was signed by U.S. Treasury Secretary, Hon. Paul O’Neill; British Ambassador to the U.S., Sir Christopher Meyer; and His Excellency the Governor of the Cayman Islands, Mr. Peter Smith CBE. Also present at the ceremony from the Cayman Islands were the Hon. Linford Pierson, Deputy Leader of Government; the Hon. George McCarthy, Financial Secretary; and the Hon. David Ballantyne, Attorney General.
The agreement provides for exchange of information, upon request, for criminal tax evasion, civil and administrative tax matters relating to U.S. federal income tax. It provides for confidential treatment of information exchanged, and, in accordance with U.S. law, any such information may not be disclosed to any third party. It applies to criminal tax evasion for taxable periods commencing 1 January 2004, and to all other tax matters for taxable periods commencing 1 January 2006.
“There has been a strong history of bilateral cooperation between the governments of the Cayman Islands and the United States, beginning with the narcotics agreement in 1984 and the Mutual Legal Assistance Treaty in 1990,” said His Excellency Mr. Peter J. Smith CBE, the Governor of the Cayman Islands. “This agreement builds upon that solid foundation and we are delighted to be here today for this occasion.”
“The Mutual Legal Assistance Treaty has been used over 180 times since 1990 to provide information to the U.S. Department of Justice in serious criminal cases,” added Mr. Smith. “The Cayman Islands was the second jurisdiction in the world to sign such a treaty with the U.S.”
The treaty is one of many ways in which the U.S. and the Cayman Islands are able to assist one another on a range of criminal and regulatory matters.“As a major financial centre, we take our international obligations seriously,” said Hon. George McCarthy, Financial Secretary of the Cayman Islands. “We have kept pace with international standards in terms of anti-money laundering regulations and have been recognized for that by organisations like the Financial Action Task Force.
“Now we are taking another important step. A divergence is taking place between those who embrace sound regulation and keep pace with international standards and developments and those who fall behind. The Cayman Islands has taken a leadership position in this area, and we intend to continue down this road. We also intend to ensure that the positions we take protect legitimate financial privacy and due process.”
The tax information agreement signed today conforms with the commitment made by the Cayman Islands to the Organisation for Economic Cooperation and Development (OECD) in May 2000. The Cayman Islands is one of six jurisdictions which made advance commitments to the OECD, and did not appear on the organisation’s list of tax havens published in June 2000.
“This agreement with the U.S. is a concrete example of what continued, positive dialogue can achieve,” added Mr. McCarthy. “The basic parameters of this agreement represent the framework that the Cayman Islands intends to remain within.”
For more information, please contact the Financial Services Secretariat at (345) 945-5819 or via email at email@example.com.