(CMR) Exclusive sources have informed CMR that the Cayman Islands will be removed from the European Union list of non-cooperative jurisdictions for tax purposes almost eight months after it was added. The decision is said to be coming down the pipeline to be formalized on October 6.
Oman will also be removed, but it is expected that Barbados and Anguilla will be added to the list. This is according to a draft text from the Council of the European Union dated 28 September.
Whilst the decision would be seen as a positive one for the Cayman Islands financial services industry during the COVID pandemic; the government has been tight-lipped on the matter. The Unity Government enacted six laws and regulations to strengthen Cayman's regulatory framework since then. These laws are aimed at removing Cayman from the blacklist and included the Private Funds Law to deal with the registration of private funds.
They also passed The Cayman Islands Monetary Authority (Administrative Fines) (Amendment) Regulations in June. By further empowering the island's financial regulatory body to impose administrative fines; the government hoped to highlight it's continuing committed to ensuring effective enforcement of the framework of its financial services. As a result of the Regulations, CIMA now has the authority to issue breach notices for a multiplicity of laws and rules, and much broader authority to impose discretionary fines than previously.
Other amended legislation included: Companies Management (Amendment) Law, 2020, Tax Information Authority (Amendment) Law, 2020, Reporting of Savings Income Information (European Union) (Repeal) Law, 2020, Private Funds (Amendment) Law, 2020, Mutual Funds (Amendment) (No. 3) Law, 2020 and the Exempted Limited Partnerships (Amendment) Law, 2020.
In February CMR revealed that Cayman had been added to a nine-country European Union blacklist of foreign tax havens. In September 2020 the Permanent Representatives Committee decided to engage to make amendments to the Annexes of the Council's conclusions of February 18, 2020.
At the time, the premier expressed his disappointment at the decision. Many political critics have squarely placed the blame on Finance Minister Tara Rivers sharing “she only one job to do and she couldn't even do that”.
The EU list of non-cooperative jurisdictions for tax purposes is designed to address threats to EU Member States' tax bases. The changes are expected to take place in writing as opposed to an in-person meeting.
Seychelles was also blacklisted and continues to work diligently to try to have itself removed from the list as well. Seychelles is expected to send amended laws for the financial services sector to its National Assembly for approval in the very near future.
Barbados is expected to be added to the list and will not be removed from the Organization for Economic Cooperation and Development (OECD) list of jurisdictions partially compliant with the exchange of tax information standard until February of next year.