Quick Facts: Tax Information Assistance & Law Enforcement Cooperation

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Tax Information Assistance

The Cayman Islands Government provides access to comprehensive tax information assistance with 20 countries including most of Cayman’s major trading partners.

In 2009, Ireland, Japan, the Netherlands, South Africa, Germany, the UK, Austria, Belgium, the Czech Republic, Luxembourg, the Slovak Republic and Switzerland joined other countries afforded tax information assistance to the Organisation of Economic Cooperation and Development standards under a unilateral mechanism, which does not require a bilateral treaty, earlier this year.

In March 2009, the Cayman Islands and seven Nordic countries (Denmark, the Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden) concluded technical negotiations on bilateral agreements, including tax information agreements.

The Tax Information Authority also administers bilateral agreements with 27 EU countries in relation to automatic reporting of savings income information, in effect since 2005.

The Cayman Islands also has eight bilateral tax information agreements, including agreements with the Nordic countries as well as an agreement with the US signed in 2001.

The unilateral mechanism, introduced in 2008, provides an additional mode for the Cayman Islands to deliver on its commitment to transparency and exchange of information in tax matters.

Together, the arrangements cover four of the seven G7 states and 17 of the 30 OECD states.

Based on its negotiating programme – which reflects OECD countries (including significant trading partners) that have indicated interest in tax cooperation arrangements – the Cayman Islands aims to enter arrangements with additional countries, including the remaining G7 and five OECD member states.

The Cayman Islands has participated in the OECD Global Forum on Taxation, having been one of the first non-OECD jurisdictions to adopt (in 2000) the principles of transparency and exchange of information, based on a level-playing field.

The Cayman Islands competent authority for tax cooperation arrangements is the Tax Information Authority, established under the Tax Information Authority Law, 2005. More information on the Authority can be found on www.tia.gov.ky.

 

Law Enforcement Cooperation

The Misuse of Drugs Law (2000 Revision) – Misuse of Drugs (Drug Trafficking Offences) (Designated Countries) Order, 1991 provides for enforcement of external confiscation orders.

Under the PCL, foreign countries may be assisted; under the MDL, all the Vienna Convention countries.

The PCL also allows the Financial Reporting Authority to onward disclose suspicious activity reports to foreign counterparts in order to report the possible commission of an offence, initiate a criminal investigation respecting the matter disclosed or assist with any investigation or criminal proceedings.

Criminal Justice (International Cooperation) Law gives domestic effect to the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (the Vienna Convention) and provides for mutual legal assistance to be given in the context of a broad range of criminal offences. The purposes for which mutual legal assistance is available are broad and include:

executing searches and seizures;

providing information and items of evidence;

identifying or tracing proceeds, property, instruments or such other things for the purposes of evidence;

immobilising criminally obtained assets; and

assisting in proceedings related to forfeiture and restitution.

Assistance is available, including at the investigative stage, to all 146 Vienna Convention countries. The MDL also contains “ship riding” powers. Over the period from 2003 to 2007, more than 150 requests for assistance were handled on behalf of the Cayman Islands’ Central Authority under the CJICL.

Meanwhile, the Terrorism Law provides for mutual legal assistance and extradition relating to terrorism and terrorist financing.

Evidence (Proceedings in other Jurisdictions) (Cayman Islands) Order enables the Grand Court to provide assistance to a court or tribunal in another jurisdiction in obtaining evidence for criminal and civil proceedings, once such proceedings have been instigated.

The court may, in relation to criminal proceedings, make an order for the examination of witnesses, orally or in writing or the production of documents.

As far as extradition is concerned, there are treaties that allow for extradition between the Cayman Islands and a range of countries. Extradition is available for any offence that would be regarded as a serious crime carrying punishment of more than one year in the Cayman Islands or the requesting state.

The European Convention on Extradition has applied to the Cayman Islands since 1996.

International Cooperation Regime recognised

the Caribbean Financial Action Task Force conducted a November 2007 third-round AML/CFT evaluation of the Cayman Islands and found that the legislative provisions and measures for mutual legal assistance are comprehensive and effective.

The full CFATF evaluation may be accessed from www.cfatf.org.