Cayman islands to disclose hidden companies and directors

[Magda Hassan]

Could be fun but I will not hold my breath either.

CAYMAN ISLANDS TO DISCLOSE HIDDEN COMPANIES AND DIRECTORS

Posted by icarus on 19 Jan 2013 /

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The Cayman Islands has been just one of a handful of countries which are primarily used for tax evasion by exploiting the tax code and the protections of foreign governments. As a British territory their laws are very much under the influence of what Britain does and doesn't want. Which makes it all the more interesting that the Cayman Islands monetary authority is now going to be disclosing a laundry list of previously hidden corporations and hedge funds using the Caymans for cover from transparency. In addition the names of those involved will be visible for the first time as well which will make it that much easier for Western governments to identify tax schemes. This is an assault on tax cheats mainly corporations and wealthy individuals.
The Caymans Islands is just the latest country to submit to banking transparency in a very long recent list.
CNBC has the news HERE:

The British overseas territory, which wants to shed its reputation for clandestine financial activity, is introducing sweeping reforms that will make public the names of thousands of previously hidden companies and their directors.
In proposals sent to Cayman-based hedge fund businesses and seen by the Financial Times, the islands' powerful monetary authority, CIMA, has outlined plans to create a public database of funds domiciled on the island for the first time. The database will also list funds' directors, pending an ongoing consultation process due to close in mid-March.
CIMA, which did not respond to a request for comment, also plans to require directors to undergo a vetting process to ensure they are qualified to act as fiduciaries for investors.

Since President Obama was sworn into office the American government has actively pursued breaking tax havens. Many banks in Switzerland won't take American clients because of the pressure being exerted on the Switzerland government and the mini banking cartel that exists in Zurich (source). For the first time in modern history Switzerland is actively disclosing personal banking information to the American authorities (source). This can only be the result of leverage which the Obama administration is exerting to its fullest.
The Obama administration entered into a treaty with Ireland another tax haven to share financial information in December of 2012 (source); it's notable that this happened after Obama won re-election. The Obama administration has negotiated treaties with Hungary, Switzerland and Luxembourg for open and transparent disclosure between governments to catch tax cheats all three of these countries are used as tax havens. Currently these treaties are being held up by Rand Paul in the Senate (source). In short the Obama administration has been on a worldwide mission to destroy tax shelters that the wealthy use to avoid paying their taxes.
The decision to make the Caymans more transparent is either the result of the LIBOR scandal or the American government requesting changes from the Brits. The British is one of America's closest allies and I suspect they would be willing to entertain concerns shared by the Obama administration. We really don't know why the British pushed this through.
The Offenders
If they're a multi-national corporation or a hedge fund they're probably abusing tax law by using offshore tax havens. U.S. corporations have anywhere from $1.4 to $2 trillion in cash just sitting in offshore banks right now (source). They have gamed the system and the only way they can bring the money back is if they pay a higher tax rate. They're putting tremendous pressure on politicians to give a "one time tax holiday" just like the "one time tax holiday" the Bush administration allowed for in 2004. That would be a disaster and would reward tax evasion.
Microsoft avoided paying $7 billion in taxes from 2009 to 2012 according to a Senate committee HERE.
CNBC highlights how Halliburton has been able to do this HERE:

U.S. law does ban virtually all commerce with the rogue nations, but there's a loophole that G.E., Conoco-Phillips and Halliburton have exploited: The law does not apply to any foreign or offshore subsidiary so long as it is run by non-Americans.
"These three companies, as far as we were concerned, appear to have violated the spirit of the law," says Thompson. "In the case of Halliburton, as an example, they have an offshore subsidiary in the Cayman Islands. That subsidiary is doing business with Iran."
That subsidiary, Halliburton Products and Services, Ltd., is wholly owned by the U.S.-based Halliburton and is registered in a building in the capital of the Cayman Islands a building owned by the local Calidonian Bank. Halliburton and other companies set up in this Caribbean Island, because of tax and secrecy laws that are corporate friendly.

Google has used the Cayman Islands and other offshore tax havens to manipulate the tax code. In 2010 they paid 2.4% on $60 billion in revenues. Bloomberg wrote a must read HERE.
Facebook paid just .3% on its profits in 2011 thanks to utilizing offshore tax havens like the CaymansHERE.
Americans became much more aware of the loopholes used by the ultra wealthy during the 2012 election precisely because of Mitt Romney's history of manipulating the tax code. We've written about that many times but there is this one from the NY Times that makes it clear tax avoidance using offshore tax havens like the Caymans is just how they do business (source).
The Senate Banking Committee put out an excellent memo highlighting how these corporations and ultra wealthy are manipulating the tax code via offshore tax havens HERE; drug cartels and terrorist organizations use the same methods too btw.

http://www.classwarfareexists.com/cayman...directors/

[Jan Klimkowski]

there's a loophole that G.E., Conoco-Phillips and Halliburton have exploited: The law does not apply to any foreign or offshore subsidiary so long as it is run by non-Americans.
"These three companies, as far as we were concerned, appear to have violated the spirit of the law," says Thompson. "In the case of Halliburton, as an example, they have an offshore subsidiary in the Cayman Islands. That subsidiary is doing business with Iran."
That subsidiary, Halliburton Products and Services, Ltd., is wholly owned by the U.S.-based Halliburton and is registered in a building in the capital of the Cayman Islands a building owned by the local Calidonian Bank. Halliburton and other companies set up in this Caribbean Island, because of tax and secrecy laws that are corporate friendly.
Google has used the Cayman Islands and other offshore tax havens to manipulate the tax code. In 2010 they paid 2.4% on $60 billion in revenues.

The cynic in me fears that if the Caymanese decide to disclose, the likes of GE and Halliburton will just bribe another bunch of "foreigners" to do the dirty laundry....