Up Front
Cayman delegation returns fromParis OECD meeting
Financial Secretary, Hon. George McCarthyhas described a November 8 - 9 inaugural meeting in Paris of theOECD-led Global Forum on Taxation as spirited, amicable and encouraging,and a process by which the Cayman Islands has much to gain.
Mr. McCarthy, who led a four-member team to the meeting, said:"The discussions were open, spirited and amicable and Caymanhas much to gain by remaining engaged in this process in a positionof leadership.
"We were encouraged by the obvious effort by the OECD tocreate a balanced forum for the discussion and analysis of fundamentalissues. If the process continues in this spirit, mutually satisfactoryresults will be that much easier to reach."
The three other members of the Cayman team were: Hon. David Ballantyne,Attorney-General; Ms. Deborah Drummond, Assistant Financial Secretary;and Dr. Christopher Rose, Executive Director of the Secretariat(Finance & Economic Development).
The Global Forum was established by the Organisation for EconomicCooperation and Development (OECD), in the wake of its June 2000report on Harmful Tax Practices, to carry forward the dialoguebetween cooperative countries and OECD members on mutually acceptablemeasures to deal with such practices. According to the OECD secretariat,the creation of a forum including non-OECD members is a ground-breakingdevelopment in terms of OECD practice.
Current members of the Forum are the six advance commitment jurisdictions(Bermuda, Cayman Islands, Cyprus, Malta, Mauritius and San Marino)and a group of eight OECD members (Canada, Holland, Italy, Japan,Norway, the United Kingdom, the United States, and the SlovakRepublic).
In all, there were 43 delegates at the meeting, which was co-chairedby Holland and the advance commitment countries by rotation.
The focus of the meeting was a preliminary identification of someof the issues that are likely to arise in the context of tax informationexchange agreements. At least one further meeting of the Forumis envisioned, in March 2001, before a working draft of any modeltext for such agreements is produced for consideration by therespective governments of the Forum members and the OECD Committeeon Fiscal Affairs (CFA).
As CFA Chairman, Mr. Gabs Makhlouf noted: "The Committeedid not wish to formulate its position prior to discussing theissues with the cooperative jurisdictions and trying to developa common approach with them."
The six advance commitment countries, including the Cayman Islands,sought during the discussions to promote the position that effectiveinformation exchange should recognise the principles of legitimateconfidentiality, 'level playing-field' as between OECD and non-OECDmembers, the sovereignty of contracting parties and reciprocaleconomic benefit.
A definite preference for bi-lateral arrangements versus multi-lateralarrangements was also expressed. The Cayman delegation furtherplaced on record the fact that considerations on tax informationexchange by the Cayman Islands would necessarily be consistentwith the terms of the advance commitment given, and that the (atthe time) impending general elections and the resulting incominggovernment would determine the exact negotiating parameters forCayman, once matters had reached that stage.
The Cayman Islands delegation also used the opportunity to establishcloser contact with the other five advance commitment countries,which it is hoped will be continued.
The Cayman delegation also held talks with the OECD secretariaton November 7, to review progress on the advance commitment andto discuss the format of the associated implementation plan, anoutline of which is to be submitted by December 31, 2000.
A comprehensive briefing on the OECD initiative as well as onthe Financial Action Task Force (FATF) initiative and the KPMGreport is planned for the incoming Executive Council as a priority.