The people of Cayman are confused

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The Cayman NetNews reports that the people of Cayman are confused by their poor international image. They say:

There is no doubt that we have become and intend to remain a clean jurisdiction in which to do business.

But are surprised to note that:

No matter how much the offshore sector here has reportedly cleaned up its act, the image of the Cayman Islands overseas is still as a haven for money laundering or a place to hide ill-gotten gains.

And they are surprised at this although, as they note:

(I)t appears that the Cayman Islands is still attracting questionable money.

All this would be amusing if it did not appear that they are serious. They honestly seem to think that the people of the rest of the world should believe that

1) they have routed out criminality despite the evidence to the contrary;

2) the only deals that happen in Cayman are legitimate;

3) that the deals done in Cayman enhance international well being.

I’ve got some simple observations to make. First, the Natwest3 used Cayman, and they’re being prosecuted for fraud. No doubt they passed the ‘know your client rules’ with flying colours. But that test does not stop reputable people doing disreputable things in the secret spaces that offshore provides.

Second, as the Tax Justice Network and others have proved time and again, tax evasion remains rife offshore, and that is criminal behaviour. If it weren’t, there would be no need for the banking and corporate secrecy that Cayman works so hard to defend. Honesty can always survive the full glare of publicity.

Finally, even if everything that took place offshore were legal and above board, how can subverting the income stream of elected governments be something that is likely to win you many friends? The secret spaces offshore cost the governments of the world $255 billion a year in lost tax revenues.And yet, even when the activities in Cayman are legitimate (and some will be) that’s what they’re intended to do. Which means they are unethical even if legal.

So wake up and smell the coffee Cayman — you’ll never be liked when what you do is unacceptable to the vast majority of people in the world.