CIFSA Responds To UK Parliament's Offshore Report

by Amanda Banks, Tax-News.com, London

11 June 2008

The Cayman Islands Financial Services Association (CIFSA) has sought to correct what it considers as a “misrepresentation” of the standards of regulation within the UK’s Overseas Territories in a statement made recently in a report by the Public Accounts Committee (PAC) of the UK’s House of Commons.

The PAC report suggested that the standards of financial regulation in most of the Territories were not as good as those which exist in the UK Crown Dependencies such as the Isle of Man and Jersey.

Eduardo Silva, Chairman of CIFSA was quick to respond to the statements comparing the two groups of UK Territories.

“CIFSA generally welcomes discussions on offshore centres because it improves the level of information on the important role of jurisdictions like the Cayman Islands. But we also feel that on occasions like this it is equally important to correct any misrepresentations, particularly those may impact international perceptions of the standards of regulation in the Cayman Islands," he commented.

Silva further revealed that Jersey officially recognises Cayman’s anti money laundering (AML) practices as equivalent to its own. This means that the Jersey Financial Services Commission’s AML/CFT requirements are satisfied if a client has met Cayman’s customer identification procedures.

The FSC in Jersey has said that financial institutions can rely on the ‘know-your customer’ and ‘due diligence’ work of the institutions in Cayman as being as robust as the laws that must be followed in Jersey, he noted.

“As evidence of the equivalence of Cayman regulatory standards, we note that the strong rate of compliance by the Cayman Islands banking sector is clearly recognised by the Public Accounts Committee in its own report to the UK Government with Cayman 63% compliant with global standards, matching the rate of the Crown Dependencies," added Silva.

CIFSA also stated that the most recent CFATF report had found the Cayman Islands financial services industry to have a strong anti-money laundering and counter terrorist financing compliance culture.

In the examination, Cayman was recognised to be compliant in 38 out of 49 measures, which was ahead of the results obtained by the UK, Canada, Spain, Italy and Ireland in similar evaluations. Only the US and Belgium have achieved a higher third-round FATF evaluation than the Cayman Islands, the CIFSA chief concluded.

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