Published 13:00 IST, February 19th 2020
Cayman Islands most prominent destination for laundering money: Study
The Cayman Islands, a British overseas territory, is one of the top destinations for hiding or laundering money, according to a study by the Tax Justice Network
- World News
- 3 min read
The Cayman Islands, a British overseas territory, is one of the top destinations for hiding or laundering money, according to a study by the Tax Justice Network, which was published on their official website. The United States and Switzerland also do most to help the globe's richest citizens to hide and launder money. According to reports, the authors also noted that the Cayman Islands was also a part of what it dubbed Britain's 'Spider web' of satellites, where London influences laws and the appointment of officials.
The study, which tests how much countries' legal and financial systems enable the hiding of wealth by checking on money-laundering laws, controls and the amount of financial activity in a country, further ranked the Cayman Islands as the most prominent centre for financial secrecy. Cayman Island reportedly also hosts more than 100,000 companies, a number that outstrips the local population. Furthermore, the European Union finance ministers have added the territory to the EU's blacklist of tax havens, along with Panama, the Seychelles and Palau.
Cayman Islands disagrees
Cayman Islands government, however, did not agree with the TJN study. The government reportedly said that the study has ignored the fact that it met global standards and it did not work 'in secret'. They further added that they even cooperated with authorities around the world. The British government has reportedly also said that it was driving greater tax transparency globally and that the Cayman Islands was free to set its own taxes.
The Cayman Islands will now be joining Fiji, Oman, Samoa, Trinidad and Tobago, Vanuatu and the three US territories of American Samoa, Guam, and the US Virgin Islands, on the “non-cooperative” list. The EU members also believe that the Cayman Islands has failed to introduce the necessary legislation to address the problems identified by Brussels. According to the EU document further said that the British oversee territory of Cayman islands were included because investment funds based there did not reflect real economic activity on the archipelago.
The TJN study also singled out the United States for not doing enough to stamp out illicit money flows at home and flagging secretive shell companies in some states. The study further put Switzerland in third place in its ranking and noted that its bank secrecy reform to share financial information with foreign authorities applied largely to rich countries rather than poor ones. Although the Swiss government reportedly said that it applied international standards and that its achievements were recognised by pan-national bodies.
(With agency inputs)
Updated 13:00 IST, February 19th 2020