Ethics and governance in the European Financial centers

The Cayman Islands have long been known as a paradise boasting brilliant blue water, pristine sand -- and absolutely no corporate or personal income tax. That last perk has made them famous as a global tax haven, luring financial companies and investments.

But now the economic downturn has hit paradise too...

To know more read The Los Angeles Times

The BBC has reported that the UK's Overseas Territories and Crown Dependencies have been told to improve standards of regulation, and find new methods of raising tax.

A government-commissioned report suggests changes offshore centres need make to meet international standards.

Michael Foot, the report's author, said that several jurisdictions had "a good story to tell, but others had more to do on regulation and tackling financial crime".

As TJN observes, one useful thing the report does is to recognise that the OECD's standards on information exchange are inadequate. It states: "In the longer term, the trend for greater transparency is likely to result in pressure to move to a system of automatic exchange of information with the aim of combating tax evasion by individuals on a cross-border basis. . . . The jurisdictions within the scope of this Review must keep pace with international developments and move towards full automatic information exchange wherever possible. . . . The Review encourages (Guernsey and the Isle of Man) to announce a firm date for a move to automatic exchange. . . The UK should call on all EU Member States and third party countries which currently apply the withholding tax option to also make a similarly firm commitment."

The Financial Times has reported that Britain’s crown dependencies have been plunged into uncertainty after the government signalled, in a dramatic sign of the intensifying pressure on tax havens, that their corporate tax regimes were unacceptable to the European Union.

The news is set to force Jersey, Guernsey and the Isle of Man to overhaul their tax regimes, possibly requiring them to introduce corporation tax.

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