Real secret of Cayman Islands? They’re not that glamorous

In a fit of pique 10 years ago, I ditched my tedious job at some newspaper or other and headed for the Cayman Islands in search of adventure, danger and intrigue. There wasn’t any.

The fuss over the Paradise Papers has again placed the nation in the public eye, although the impression produced is shy of the reality.

Perhaps the words Grand Cayman conjure an image of glamour and excess. Of scheming bankers, cutting fiendish deals on yachts, surrounded by the most fantastically good looking people on earth. Of James Bond-alike liaisons, with guns, fast cars and passports spread over hotel beds. Sadly, no.

 Many of the 13.4 million Paradise files hacked from law firm Appleby referenced Cayman. The revelation that caught the  most attention was that the Queen’s private estate invested nearly £6 million in a fund held on the islands. Perhaps I’m jaded, but I can’t get much past this: so what? Grand Cayman is a tax haven — it prefers the term tax neutral — but you can hardly blame it for that. It’s far from obvious what else it would do to make a living, aside from tourism.

It has some great diving. Some good golfing. A nice beach. Five or six really good restaurants. If you rocked up to the right cocktail bar on Friday evening, you could see the prime minister enjoying a game of dominoes. Buy him a drink, you could join in. And that’s about it.

It offers a nice life to the accountants who come from the UK and the US to work. And the financial services industry gives Caymanians a better income than they might otherwise have, though very  few are anything close to rich. They don’t pay income tax,  but everything else is  really expensive.

 The most common word used to describe Cayman, alongside tax haven, is “secretive”.

The locals are certainly shy of criticism, and the authorities perhaps don’t engage as well as they might to explain their position. It’s an insular place that doesn’t encourage sarcasm; just writing this piece makes me feel disloyal, and my ties to the place are minimal to say the least. But the charge of secrecy doesn’t really stack up.

A Newsweek piece last year on the top 10 tax havens had Cayman in the first five, but behind Switzerland, Hong Kong, the US and Singapore. (Britain was a lowly 15th — must try harder.) The magazine reported that: “Cayman retains many secrecy features — not least a law that can put people in jail not just for revealing confidential information, but merely for asking for it.”

I gulped when I read that and wondered how I had escaped clink myself (the Cayman jail is very unpleasant, everyone there agrees). I check with my-man-in-a-Panama-hat if this is true. He replies: of course it isn’t. This law does not exist. Indeed, there’s a slight feeling locally that lately the authorities might have been a bit too enthusiastic in their desire to assist overseas tax collectors at the expense of civil liberties.

According to The Guardian, the Cayman Islands is the “most notorious tax haven on earth”, but that notoriety may have more to do with the Tom Cruise film The Firm than real life.

Because Cayman is near to Miami and Cuba, it has in the past been a handy drop-off point for money laundering, allegedly. Legend has it that bags of cash would be chucked out of planes on to beaches to be gathered by local crime lords. I spent ages looking for one of those bags — no luck. Cayman remains a British dependency, which means that the tax laws it exploits are ours; we created it.

And like the Queen, there’s a very good chance that some of your savings, some of your pension fund, is linked to the Cayman Islands without you knowing. The odds are better than even, I’d say.

The Cayman Islands make money, about $350 million a year, charging companies fees to register and get work permits. You can get angry about this if you want but, in the  great scheme of things, that just isn’t very much.

If you seek skulduggery, there’s far more in the City and on Wall Street. As for money laundering, the Isle of Man and Guernsey have greater cases to answer.

News source: Standard

Support Terms of Use Privacy Policy