Cayman losing business to 'white list' centres

The cost of not making the OECD "white list" could cost offshore centres tens of millions of dollars in business, the Cayman Islands Financial Services Association (CIFSA) says.

CIFSA president Anthony Travers says white-listed jurisdictions will inevitably poach new business off their grey-listed counterparts.

According to local reports from Cayman, offshore financial centres which have met the transparency and regulatory requirements of the OECD white list have already begun using their enhanced status to capture new business deals.

Cayman is currently struggling to extricate itself from the OECD's "grey list" of countries which have shown willing to meet its demands but have not done so yet.

Speaking at an Alternative Investment Management Association (AIMA) event, Travers says: "I have heard anecdotal evidence that Cayman law firms are losing 30% to 50% of new deals.

"While I don't exactly how much of this is due to being on the grey list, this is an attrition rate that Cayman cannot sustain."

Travers slams the Cayman government's efforts to sign bilateral agreements to meet the OECD's minimum number to get on the "white list" as "not good enough".

White list status demands Tax Information Exchange Agreements (TIEAs) are in place with at least 12 other jurisdictions. Cayman currently has eight.

Travers also blames the private sector for not taking a proactive approach to defend Cayman against US and UK legislators critical of tax havens.

He says it is "well past the point" of launching a letter writing and PR campaign to politicians to persuade them of the function of Cayman as an offshore centre.

At the centre of the US and UK's attacks is how 12,000 companies can be registered in Ugland House, Maples and Calder building.

Travers believes the private sector, through an association like CIFSA should negotiate with "hostile legislators" on behalf of government. Consequently the government would have to give the association authority to act on the country's behalf, he says.