Cayman And US Should Stand Together Over EU Savings Tax Directive

by Mike Godfrey, Tax-News.com, Washington

26 November 2002

Speaking in the Cayman Islands last week, former US Congressman and chief executive of The Livingston Group, Robert L. Livingston advised the Cayman Islands and the United States to stand shoulder to shoulder in opposition to the European Union's Savings Tax Directive.

'The Cayman Islands' position is the United States' position. The United States and the Cayman Islands have a common interest,' Mr Livingston explained, continuing:

'It's a very strenuous position when one has to deal with the issues of capital flow, particularly attempts to restrict capital flow. In the short run it (EU Draft Savings Directive) will surely hurt the Cayman Islands but in the long run it will surely hurt the United States. It will happen quicker in the Cayman Islands, but once you start restricting the flow of capital you make investors uneasy. They may believe that there is the likelihood that they will not get their money back so they will pull their money out and put it somwhere where they don't have to worry.'

Speaking to the Cayman Net News service, the head of The Livingston Group - which advises the Cayman government and lobbies on its behalf - announced that he will be putting this case forcefully before President Bush and Congress in an attempt to persuade them to totally reject the EU's savings tax information exchange plans.

'If the United States does not go along with these rules, some European countries will be less inclined to go on their own,' he explained. Mr Livingston added that consideration also needs to be given as to how the Cayman Islands are perceived by the international community.

'A lot of people in the US still view the Cayman Islands as a pina colada country and one of our goals is to change that perception.'

Recommended