April 3, 2009 / 9:13 PM / 10 years ago

Cayman Islands plays down "gray" tax haven listing

MIAMI, April 3 (Reuters) - The government of the Cayman Islands, a major Caribbean financial center, said on Friday it was moving to improve its cooperation to fight tax evasion and played down its inclusion on an OECD “gray list.”

“We have taken note of the Cayman Islands position and believe that the Cayman Islands is cast in the ‘lightest shade of gray’ among the financial centers with which we have been listed,” Kurt Tibbetts, the Cayman Islands’ Leader of Government Business, said in a statement sent to Reuters.

The Group of 20 leading industrialized and emerging nations pledged on Thursday to crack down on jurisdictions that fail to cooperate in cross-border tax evasion cases, using information from the OECD as its basis.

The Cayman Islands, a British overseas territory, is home to an estimated 8,000 hedge funds and a host of other funds aimed at professional or qualified investors and institutions.

It was included, along with a host of other small Caribbean territories, on a list drawn up by the Paris-based Organization for Economic Cooperation and Development of tax havens which have agreed to improve transparency standards, but have not yet signed the necessary double taxation accords.

Tibbetts said the Cayman Islands government was reviewing the measures proposed by the G20 leaders, especially those related to strengthening financial supervision and regulation, resisting protectionism and promoting global trade and investment, and strengthening global financial institutions.

“Government will be looking for opportunities to engage with international standard setters directly or through government counterparts to provide our input where we can, keeping with our commitment to being ‘a strong link in the chain’ in the global financial system,” he added.

The OECD had recognized that the Cayman Islands had set “a good example” by enacting legislation that allowed it to exchange tax information unilaterally, Tibbetts said, adding the territory had identified 12 countries with which it was prepared to do this.

The OECD said it was reviewing this legislation.

Cayman Islands committed to the OECD tax standard in 2000.

Also included on the OECD’s “gray list” of tax havens was Antigua and Barbuba, whose government and regulators last month seized banks and property belonging to Texas billionaire Allen Stanford, who is accused of an $8 billion securities fraud.

Other Caribbean states and territories on the same OECD list were: Anguilla; Aruba; Bahamas; Bermuda; British Virgin Islands; Dominica; Grenada; Montserrat; St. Kitts and Nevis; St. Lucia; St. Vincent and Grenadines and Turks and Caicos.

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