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Cayman Islands Delegation Returns From OECD Meeting In Paris

Caymannetnews

21 November 2000


This story is reproduced by kind permission of Caymannetnews at http://www.caymannetnews.com

Financial Secretary, Hon. George McCarthy has described a November 8 - 9 inaugural meeting in Paris of the OECD-led Global Forum on Taxation as spirited, amicable and encouraging, and a process by which the Cayman Islands has much to gain.

Mr. McCarthy, who led a four-member team to the meeting, said: "The discussions were open, spirited and amicable and Cayman has much to gain by remaining engaged in this process in a position of leadership.

"We were encouraged by the obvious effort by the OECD to create a balanced forum for the discussion and analysis of fundamental issues. If the process continues in this spirit, mutually satisfactory results will be that much easier to reach."

The three other members of the Cayman team were: Hon. David Ballantyne, Attorney-General; Ms. Deborah Drummond, Assistant Financial Secretary; and Dr. Christopher Rose, Executive Director of the Secretariat (Finance & Economic Development).

The Global Forum was established by the Organisation for Economic Cooperation and Development (OECD), in the wake of its June 2000 report on Harmful Tax Practices, to carry forward the dialogue between cooperative countries and OECD members on mutually acceptable measures to deal with such practices. According to the OECD secretariat, the creation of a forum including non-OECD members is a ground-breaking development in terms of OECD practice.

Current members of the Forum are the six advance commitment jurisdictions (Bermuda, Cayman Islands, Cyprus, Malta, Mauritius and San Marino) and a group of eight OECD members (Canada, Holland, Italy, Japan, Norway, the United Kingdom, the United States, and the Slovak Republic).

In all, there were 43 delegates at the meeting, which was co-chaired by Holland and the advance commitment countries by rotation.

The focus of the meeting was a preliminary identification of some of the issues that are likely to arise in the context of tax information exchange agreements. At least one further meeting of the Forum is envisioned, in March 2001, before a working draft of any model text for such agreements is produced for consideration by the respective governments of the Forum members and the OECD Committee on Fiscal Affairs (CFA).

As CFA Chairman, Mr. Gabs Makhlouf noted: "The Committee did not wish to formulate its position prior to discussing the issues with the cooperative jurisdictions and trying to develop a common approach with them."

The six advance commitment countries, including the Cayman Islands, sought during the discussions to promote the position that effective information exchange should recognise the principles of legitimate confidentiality, 'level playing-field' as between OECD and non-OECD members, the sovereignty of contracting parties and reciprocal economic benefit.

A definite preference for bi-lateral arrangements versus multi-lateral arrangements was also expressed. The Cayman delegation further placed on record the fact that considerations on tax information exchange by the Cayman Islands would necessarily be consistent with the terms of the advance commitment given, and that the (at the time) impending general elections and the resulting incoming government would determine the exact negotiating parameters for Cayman, once matters had reached that stage.

The Cayman Islands delegation also used the opportunity to establish closer contact with the other five advance commitment countries, which it is hoped will be continued.

The Cayman delegation also held talks with the OECD secretariat on November 7, to review progress on the advance commitment and to discuss the format of the associated implementation plan, an outline of which is to be submitted by December 31, 2000.

A comprehensive briefing on the OECD initiative as well as on the Financial Action Task Force (FATF) initiative and the KPMG report is planned for the incoming Executive Council as a priority.

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