G20: Beginning of the end?

Cayman Islands government officials accept they are powerless to influence the outcome of this week’s G20 conference in London.

Mr Brown

Mr Brown

As global leaders including UK Prime Minister Gordon Brown continued to attack offshore financial centres in the run up to the summit, Leader of Government Business Kurt Tibbetts said it remains unclear whether participating countries will compile a blacklist of tax havens and, if so, if it will include the Cayman Islands.

‘The ultimate results are not under our control as the G20 environment is exceedingly political and anyone perceived to be in the offshore cohort, as defined by the UK and other states, is vulnerable,’ Mr. Tibbetts said at the Cabinet press briefing Thursday.

His comments came after UK Prime Minister Gordon Brown last week told the European Parliament that it is time to act against tax havens and offshore centres.

‘I believe that we can, for the first time, agree the big changes necessary for coordinated action that will signal the beginning of the end for offshore tax havens and offshore centers,’ Mr. Brown said.

Mr. Tibbetts said ‘If Prime Minister Brown means to refer to centres that do not observe international standards that are uncooperative and non-transparent, then so be it.’

‘But if he means to destroy legitimate, cooperative and transparent centres such as the Cayman Islands – even London and New York, who are generally regarded as offshore centres – then you can see what we are all up against.’

World leaders are due to meet in London Thursday for the conference. It will be only the second time the group has met since the start of the global financial crisis.

International leaders have been focusing in on tax havens and offshore financial centres, despite claims it is a diversion from the main issue of tackling the banking regulatory problems that prompted the crisis.

A White House official said Saturday that G20 leaders will issue new ‘rules of the road’ for tax havens and offshore financial centres when they meet Thursday, but he did not go into specifics.

Mr. Tibbetts revealed that he had recently written to UK Prime Minister Gordon Brown, Chancellor of the Exchequer Alistair Darling, as well as other key treasury and FCO officials, to reinforce the Cayman Islands’ commitment to tax information cooperation.

Mr. Tibbetts said his government will continue to be relentless in pursuit of proper recognition of the Cayman Islands’ status as a responsible and cooperative financial services centre.

He pointed out that Cayman Islands government officials recently completed tax information sharing agreements with a number of European countries.

Minister with responsibility for international financial services policy, Alden McLaughlin, is scheduled to travel to Stockholm, Sweden, to sign some of the agreements this week.

‘These major developments, combined with our existing tax information agreements with the US, means the Cayman Islands has a combined total of 16 tax information arrangements with OECD member states to the required OECD standards,’ Mr. Tibbetts noted.

The tax sharing arrangements will allow overseas authorities to obtain tax information for the purposes of both commercial and criminal investigations.

‘By any rational analysis we are transparent and we are cooperative,’ he said.

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