CAYMAN ISLANDS Law and Practice Contributed by: Jason Ta, Ben Magahy, Paul Walters and Gemma Walters, Travers Thorp Alberga
practices for combating money laundering, terrorist financing and proliferation financing; • the adoption of new financial services prac - tices and technologies within the Cayman Islands is facilitated; and • best practices and guidance are developed CIMA is the primary regulator in the Cayman Islands and has broad regulatory oversight of regulated entities in the Cayman Islands. In performing this regulatory function, CIMA shall: for the virtual asset service sector. 2.6 Jurisdiction of Regulators • endeavour to promote and enhance market confidence, consumer protection and the reputation of the Cayman Islands as a finan - cial centre; • endeavour to reduce the possibility of finan - cial services business or relevant financial business being used for the purpose of money laundering or other crime; and • recognise the international character of finan - cial services and markets and the necessity of maintaining the competitive position of the Cayman Islands, from the point of view of both consumers and suppliers of financial services, while conforming to internationally applied standards insofar as they are relevant and appropriate to the circumstances of the Cayman Islands. In addition, the Department for International Tax Co-operation is a department in the Min - istry of Financial Services and Commerce. It is responsible for administering all of the Cayman Islands’ legal frameworks for international co- operation in tax matters, and for carrying out the functions of the Tax Information Authority, the Cayman Islands’ competent authority. The
Tax Information Authority’s function is to collect information on tax matters and exchange that information with other Competent Authorities pursuant to relevant international agreements. Broadly speaking it covers supervision of: • the Common Reporting Standard, which is the global standard for the automatic exchange of financial account information for tax purposes; • the Foreign Account Tax Compliance Act, which is the mechanism for reporting informa - tion on financial accounts held by US persons to the US Internal Revenue Service (IRS); • the Cayman Islands Economic Substance Act which contains the rules for satisfying the international standard for substantial activities requirements; • Country-by-Country Reporting which imple - ments the requirements of Action 13 of the OECD/G20 BEPS actions and country-by- country reporting requirements that are filed by certain multinational enterprises with domestic tax authorities; and • the Exchange of Information on Request which takes place when the tax authority of a requesting jurisdiction asks for particular information from the competent authority of a partner jurisdiction. Finally, the Office of the Ombudsman is the supervisory authority for data protection-related matters and is empowered to investigate, medi - ate and decide complaints under the Data Pro - tection Act. 2.7 No-Action Letters CIMA does not currently issue “no-action” let- ters.
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