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CIFSA, CIG Statements

LoGB Hon D. Kurt Tibbetts, JP

Press Release: New CIFSA Task Force to Undertake Global Engagement Strategy

The Cayman Islands Financial Services Association (CIFSA) announced today the formation of a task force of leading representatives of the financial services industry that will engage with relevant authorities in the U.S. and other nations to help build understanding and acknowledgement of the global benefits of Caymanís financial services sector.

The task force will be headed up by newly-appointed CIFSA Chairman Mr. Anthony Travers, currently Chairman of the Cayman Islands Stock Exchange, who has represented the financial services sector in relation to the Organisation for Economic Development and Cooperation (OECD) Harmful Tax Competition Initiative and the European Union Savings Directive.

In making the announcement, Mr Travers said:

"We need first to understand better the real concerns of those legislators in the U.S. whose opinions count. We then have a clear obligation both to them and to the people of these Islands to assist with effective solutions and ones that are not counterproductive. That will require a far better understanding by some of the benefits enjoyed by the U.S. from capital that flows through the Cayman Islands to American financial institutions. There is nothing new in this endeavour. Co-operation of this sort has always been the accepted position of the Cayman Islands. We see it as the primary function of this task force to ensure that if change is to be made, it should be made for the benefit of all interested parties."

The Cayman Islands Government endorsed the formation of the CIFSA task force and expects to deploy its senior representatives to help support its efforts. The Honourable Kurt Tibbetts, Leader of Government Business, said:

"This new initiative builds on the many years of private-public sector partnership which has always been the cornerstone of the strength and integrity of the Cayman Islands financial sector. Throughout Governmentís global communications efforts in support of the financial services sector we have always focused on the depth and breadth of talent in the Cayman Islands as one of the most important factors in our integrity and continued success. We welcome the opportunity to coordinate our existing efforts and resources with CIFSA to augment and diversify Caymanís voice on the international stage, particularly in what is a challenging global economic and policy landscape."

CIFSA identified the immediate objectives of the task force will be to establish:

  • Proper recognition for the advances made by the U.S. Department of Justice and the U.S. Internal Revenue Service in ensuring full transparency with the Cayman Islands in relation to all matters including taxation.
  • That the clear water that exists between the Cayman Islands and those jurisdictions which are non-OECD compliant and which still maintain bank secrecy in tax matters is fully recognized and respected and that to reinforce that distinction, a review be undertaken of Cayman Islands legislation and appropriate changes be recommended.
  • That there is developed a better appreciation of the tax information exchange agreements and the unilateral disclosure of information mechanism already legislated by the Cayman Islands Government.
  • That if there are expressed concerns with the operation of existing transparency agreements with the U.S. or others, that sympathetic consideration will be given to their review by the Cayman Islands Government.
  • That proper recognition is given to the role of the Cayman Islands in providing trillions of dollars of funding to U.S. financial institutions and to the importance of the investment by funds into U.S. markets in that there exists mutual benefit to the U.S. and the Cayman Islands financial industries in the current relationship.
  • That non-U.S. investors should be in a position to continue to invest in U.S. markets and to rely on the expertise of U.S. fund managers without the risk of being taxed as U.S. citizens.
  • That the threat of extra territorial taxation is likely, as before, to reduce the tax base of the U.S. not to increase it and may cause irreparable damage to the domestic U.S. fund management industry.
  • That there has been an excellent history of cooperation in matters of crime, money laundering and tax evasion between the Cayman Islands and the U.S. and Europe and that the statistics now reveal that tax evasion in the Cayman Islands is at marginal levels and therefore that the suggested tax revenues sought by further initiatives from the U.S. and Europe in relation to the Cayman Islands are grossly inflated, speculative and that no reliance should be placed on them.
  • Given the extraordinary stability shown by Cayman Islands financial institutions and the domestic economy throughout the credit crisis, that no credibility should attach to those who suggest that the Cayman Islands or its investment vehicles were in some way responsible.
  • That the entire financial crisis could have been avoided by proper regulation of bank and mortgage lending in the onshore jurisdictions and markets (in particular the failure to prudently limit leverage) and that no objection existed nor would exist in the future to Cayman Islands investment vehicles being subject to the proper application of any such regulation in such markets.
  • That further consideration be given to transfer pricing reform before the competitive advantage that accrues to the offshore subsidiaries of U.S. corporations in global trade by means of tax deferral is lost.

The full statements follow:

Statement by LoGB - CIFSA and Cayman Islands Government News Conference, 13 March 2009

Good afternoon ladies and gentlemen,

I am glad you were able to join us here today for this short briefing. When the members of the Cayman Islands Financial Services Association informed us of their plans just days ago, we felt it was important news to share with you.

While my fellow panelists from CIFSA will share the details of their announcement, I am pleased to be here today to offer Government's congratulations and full support to CIFSA on as it undertakes a significant, global public affairs effort in support of the financial services sector from a private sector perspective drive by a special task force it has formed.

Joining me and Minister McLaughlin on the panel today are two members of the private sector representing CIFSA - Mr James Bergstrom, Managing Partner of Ogier and Mr Eduardo Silva, Managing Director of SUL America International Bank - they will each be speaking about the developments at CIFSA and then we will allow a few moments for questions.

I just want to say that we in Government welcome the opportunity to partner our existing efforts and resources with those from CIFSA to augment and diversify our voice on the international stage, particularly in relation to the strength, stability and contribution of the Cayman Islands financial services sector.

Throughout Government's global communications efforts in support of the financial services sector, we have always focused on the depth and breadth of talent in the Cayman Islands as one of the most important factors in our longevity and continued success.

These important changes within CIFSA will undoubtedly showcase and leverage that talent as we work together to secure the recognition that we all know our financial services sector deserves.

I will now ask Eduardo to say a few words.

Remarks by CIFSA Representatives

Eduardo D' Angelo P. Silva, Vice Chairman:

The Cayman Islands Financial Services Association (CIFSA) is announcing today the formation of a task force of leading representatives of the financial services industry that will engage with relevant authorities in the U.S. and other nations to help build understanding and acknowledgement of the global benefits of Cayman's financial services sector.

The financial industry is essential to the well being of our country, and we recently had additional evidence of this fact in the Economic Impact Study that was released by Oxford Economics showing that finance represents 55 per cent of the country's economy, generating more that 12,000 jobs.

The formation of this task force and the support it is receiving from the industry is a testimony of the long term commitment of this industry to Cayman.

The task force will be headed up by Mr. Anthony Travers who has recently been appointed Chairman of the Board at CIFSA. Mr. Travers regrets his absence today due to a previous engagement, but he asked me to convey the following message:

"We need first to understand better the real concerns of those legislators in the U.S. whose opinions count. We then have a clear obligation both to them and to the people of these Islands to assist with effective solutions and ones that are not counterproductive. That will require a far better understanding by some of the benefits enjoyed by the U.S. from capital that flows through the Cayman Islands to American financial institutions. There is nothing new in this endeavour. Co-operation of this sort has always been the accepted position of the Cayman Islands. We see it as the primary function of this task force to ensure that if change is to be made, it should be made for the benefit of all interested parties."

James Bergstrom, Task Force Member:

The task force plans to build on the significant efforts and actions which have already been undertaken by various members of the private sector as well as by the Cayman Islands Government.

We believe that CIFSA is the most appropriate organisation through which to co-ordinate these efforts. The make up of the task force is truly a representative body of Cayman's private sector and includes bankers, lawyers and accountants. It will also provide the Cayman Islands Government with a more focused contact point for co-ordinating its efforts with those of the private sector.

The private sector has thousands of touch points with users of Cayman's services in the onshore world. By utilising these contacts and adding the expertise of those who have been appointed to the task-force, CIFSA believes the efforts being made will be significantly strengthened and will be of assistance at all levels to the international discussions, including the government to government negotiations. This is clear evidence of the private sector's continuing commitment to the Cayman Islands and we are committed to helping to do what is necessary to ensure that Cayman's financial services industry comes out of the current assault in the best possible shape.

Initial members of the task force include:

  • Anthony Travers, Chairman
  • Eduardo D'Angelo P. Silva, Vice Chairman
  • Dan Scott, Ernst & Young
  • Nick Freeland, PricewaterhouseCoopers
  • Conor O'Dea, Butterfield Bank
  • James Bergstrom, Ogier
  • Simon Whicker, KPMG
  • Stuart Dack, Cayman National
  • Gary Linford, AIMA representative