In part 1 of a three part series Paul Byles takes a General Elections inspired look at the current state, challenges and possible strategies to take the Cayman Islands financial services sector forward.
As is well known by now, the United States enacted a tax reform in
2010 known as the Foreign Account Tax Compliance Act, which seeks to end
global tax evasion by Americans through the use of offshore bank
On 6 November, 2012, after approximately $6 billion was spent by
candidates and political groups, United States voters decided to keep
the status quo. Barack Obama won re-election and will serve as president
for another four years.
Anti-offshore advocates regularly make the point that jurisdictions such as the Cayman Islands are to blame for the fiscal woes of their respective governments be this in the UK, USA or elsewhere. There continue to be several weaknesses in their arguments but it has also been a more than curious observation that their advocacy efforts focused more abroad than at home.
If you were to carry out a survey of the articles published by pro
offshore writers, you would very likely find that the vast majority of
them either blame external factors for the challenges faced by OFCs or
place these external factors at the heart of their success.
As a result of misconception, during the
first tranche of the global financial crisis, world leaders came out on
the attack against OFCs, arguing that they are inherently bad and have
to be stopped in order to protect dwindling government tax revenue.
Those who work within the industry or are familiar with the various
jurisdictions know that this negative image actually bears little
relation to reality.