Use of incorrect information, biased standards make experiences unreliable sources of details about Cayman Islands except TJN makes vital adjustments
GEORGE TOWN, Cayman Islands, September 22, 2021–(BUSINESS WIRE)–Cayman Finance has immediately launched a new study that critically assesses the methodology and information used to evaluate the Cayman Islands in Tax Justice Community’s (TJN) ‘Monetary Secrecy Index’ (FSI). Important flaws in TJN’s selection of information and scoring have rendered the 2020 report an unreliable supply for correct details about the Cayman Islands monetary companies trade. Future TJN experiences’ can even lack credibility with out crucial adjustments within the software of their very own methodology – and Cayman Finance will proceed to scrutinise and analyse future editions to make sure continued accountability.
Forward of the anticipated publication of the opposite TJN experiences this fall, Cayman Finance commissioned the evaluate to analyse the calculations of the earlier report revealed in 2020, which incorrectly positioned the Cayman Islands first globally in its secrecy rating. This evaluation, by achieved economist Julian Morris, recognized vital flaws in how TJN utilized its personal unique methodology, which resulted in distorted ultimate rankings, creating biased and deceptive conclusions.
“The Cayman Islands has demonstrated its dedication to the widespread battle for efficient world transparency and worldwide cooperation requirements. Nevertheless, a report on transparency must be clear itself and Tax Justice Community’s 2020 Monetary Secrecy Index’s failure to satisfy that customary compromises the credibility of its conclusions,” stated Jude Scott, the CEO of Cayman Finance. “TJN used estimates and unqualified assumptions when correct information was publicly out there. With out substantial adjustments to TJN’s software of their very own methodology in future experiences, the credibility of these assessments as unbiased sources utilized by different organisations shall be misplaced.”
Cayman Finance’s evaluation discovered that TJN’s 2020 Monetary Secrecy Index had:
Used inaccurate methodology – the FSI report didn’t comply with its personal methodology when calculating a International Scale Weight (GSW) – the first issue for figuring out a jurisdiction’s rating — for Cayman. TJN selected to make use of portfolio liabilities as a substitute of publicly-available information for monetary companies exports. Consequently, TJN’s estimate of GSW for Cayman was practically 9 instances what it ought to have been. If TJN had precisely utilized their very own methodology on simply this level, Cayman would already drop down to sixth on the FSI.
Used biased standards – the FSI report used biased Key Monetary Secrecy Indicators, thereby skewing Cayman’s rating additional. For instance, the FSI provides Cayman a 100% secrecy rating for lack of public entry to civil tax proceedings despite the fact that Cayman has no such proceedings as a result of it doesn’t have company or private earnings tax. If these biased indicators have been eliminated or extra precisely scored together with an accurate GSW calculation, Cayman would drop down even additional on the FSI record to 34th place.
Julian Morris, main economist and writer of the Cayman Finance report, explains additional: “Whereas the FSI is clearly an bold try to establish jurisdictions that contribute to illicit monetary flows, inappropriate and statistically questionable use of its metrics undermine the integrity of their findings. Except TJN makes vital adjustments in future experiences—specifically, to make use of correct information, to regulate or take away biased indicators, and to combination information utilizing correct statistical strategies –the FSI shouldn’t be taken significantly as an evaluation of jurisdictions’ contributions to illicit monetary flows.”
Scott concludes: “We’re assured within the management the Cayman Islands Authorities and our monetary companies trade have proven in adopting world requirements for transparency and tax info sharing. Whereas fraud is a world situation that all of us have a continued position in tackling, each the EU and the OECD have not too long ago reviewed the Cayman Islands tax impartial regime and located it to be clear, in line with good tax governance rules and with out the existence of dangerous tax regimes. These are the sorts of internationally-recognised assessments that must be thought of when assessing the Cayman Islands.”
A ‘Overview of TJN’s Monetary Secrecy Index’ by Julian Morris, in addition to analyses of different TJN experiences, might be discovered at www.caymanfinance.ky.
About Cayman Finance:
Cayman Finance is the affiliation of the monetary companies trade of the Cayman Islands, a premier world tax impartial monetary hub effectively connecting legislation abiding customers and suppliers of funding capital and financing all over the world. Cayman Finance represents first fee service suppliers inside funding funds and asset administration, banking, insurance coverage, reinsurance, capital markets, and trusts sectors and world class fiduciary, authorized, and public accounting service suppliers. Moreover, Cayman Finance represents 15 trade associations. Be taught extra at:www.caymanfinance.ky
About Jude Scott:
Jude Scott is a revered and recognised professional on world monetary companies and has served as CEO of Cayman Finance since 2014. He retired as an Audit Companion in 2008 after spending over 23 years with Ernst & Younger and beforehand served because the International CEO of Maples and Calder. Jude attained in depth expertise inside the Cayman Islands’ monetary companies trade, having served on varied authorities and personal sector committees, together with: the Cayman Islands Monetary Providers Council; the Cayman Islands Society of Skilled Accountants; the Schooling Council; the Insolvency Guidelines Committee; and the Inventory Change.
About Julian Morris:
Julian Morris is an economist with over 25 years’ expertise in suppose tanks and academia. A Senior Fellow at Purpose Basis, Senior Scholar on the Worldwide Heart for Regulation and Economics, and Fellow of the Royal Society of Arts, he’s the writer of dozens of scholarly articles and the editor of a number of books. Julian’s work focuses on the position of political and authorized establishments as they relate to entrepreneurship, innovation, and sustainable growth. A graduate of Edinburgh College, Julian has Masters levels from College Faculty London and Cambridge College, and a legislation diploma from the College of Westminster.
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