Cultural History Exhibition is displayed within the museum, and teaches patrons about historical customs and traditions native to the Cayman Islands. The Gallery sponsors eight exhibitions every year and is located in the Harbour Place in George Town. See also: Scuba diving in the Cayman Islands [edit] Financial services industry This section may require cleanup to meet Wikipedia's quality standards. Please improve this article if you can (May 2008). The Cayman Islands are widely recognised to be one of the world's leading offshore financial centres. The Cayman Islands financial services industry encompasses banking, mutual funds, captive insurance, reinsurance, vessel registration, companies and partnerships, trusts, structured finance and the Cayman Islands Stock Exchange. As of December 2005, just over 70,000 companies were incorporated on the Cayman Islands including 430 banking and trust companies, 720 captive insurance firms and more than 7,000 funds. The government distinguishes between local (or "ordinary" companies), doing business primarily with the local population, and "exempted" companies conducting business primarily with overseas entities. A recent report released by the International Monetary Fund (IMF) assessing supervision and regulation in the Cayman Islands' banking, insurance and securities industries, as well as its anti-money laundering regime, recognized the jurisdiction's comprehensive regulatory and compliance frameworks. "An extensive program of legislative, rule and guideline development has introduced an increasingly effective system of regulation, both formalising earlier practices and introducing enhanced procedures," noted IMF assessors. The report further stated that "the supervisory system benefits from a well-developed banking infrastructure with an internationally experienced and qualified workforce as well as experienced lawyers, accountants and auditors," adding that, "the overall compliance culture within Cayman is very strong, including the compliance culture related to AML (anti-money laundering) obligations...". The Cayman Islands had previously (briefly) appeared on the FATF Blacklist in 2000, although its listing was thought to be harsh, and was criticised at the time.[2] From [9]: "In May 2000, the Cayman Islands avoided the OECD's infamous blacklist by "committing" itself to a string of reforms to improve transparency, remove discriminatory practices, and begin to exchange information with OECD member states about their citizens. However, with the election of George W. Bush to the U.S. presidency, cooperation between Cayman and the OECD lost momentum. In May 2001, after the U.S. Treasury Department announced that it would not support the OECD initiative, other than pursuing tax exchange agreements, the OECD turned its attention to another initiative, the EU Tax Savings Directive." "While the... (tax information exchange agreements (TIEA))... somewhat bolster the U.S. government's ability to prosecute corporations and individuals engaging in tax evasion, the agreements are limited, and in most cases do not allow the IRS to investigate suspected corporations or individuals unless there is a court order or strong evidence of criminal activity." As one Cayman official stated, "Despite excellent fishing in the Cayman waters, no fishing expeditions are allowed." Another obstacle hampering the IRS investigations of tax fraud by U.S. citizens in the Cayman Islands is Cayman's Confidential Relationships Preservations Law (CRPL), which requires banking confidentiality unless there is evidence of criminal activity. While the Cayman government has gone a long way towards enforcing due diligence and the sharing of information with the U.S. government, Cayman's banking privacy laws remain intact. David McConney, CEO of Cayman National Bank, says, "Financial privacy is fundamental to traditional banker/customer relationships. If you have not committed a criminal act, no Cayman financial institution may release any information to any third party without your express approval." If the IRS wants to investigate potential wrongdoing by a U.S. corporation or individual, it must request information from Cayman's chief justice on a case-by-case basis. Unfortunately, this painstaking process is inadequate to deal with the numerous cases of tax fraud perpetrated by U.S. citizens and corporations. Furthermore, the IRS does not have sufficient resources to pursue investigations of wrongdoing on a case-by-case basis." However, [10] states: "On 27 November 2001, the Cayman Islands, concluded a tax information exchange agreement with the U.S. The agreement provides for exchange of information, upon request, for criminal tax evasion, civil and administrative tax matters relating to U.S. federal income tax. It provides for confidential treatment of information exchanged, and, in accordance with U.S. law, any such information may not be disclosed to any third party. It applies to criminal tax evasion for taxable periods commencing 1 January 2004, and to all other tax matters for taxable periods commencing 1 January 2006." From [11]: "OECD commitment In May 2000 the Cayman Islands gave a letter of commitment to the OECD relating to alleged harmful tax competition. Under the letter of commitment, the Cayman Islands Government will implement a plan to share bank account information with foreign Governments that are conducting criminal tax evasion investigations for the first tax year after 31 December 2003, and on civil and administrative tax matters for the first tax year after 31 December 2005. Tax information exchange agreement On 27 November 2001 the Cayman Islands entered into a tax information exchange agreement with the US. The agreement is structured to conform with the Cayman Islands’ OECD commitment of May 2000. The implementation procedure will require that information be provided only in response to a specific request which is relevant to a tax examination or investigation conducted in accordance with the laws of the requesting state. Requests will be submitted by foreign tax authorities to a competent authority in the Cayman Islands who will act in a capacity similar to that in which the Cayman Islands Chief Justice has acted pursuant to other international information exchange agreements. Confidentiality provisions will ensure that information that has been exchanged is adequately protected from unauthorised disclosure. It is likely that there will be further bilateral tax information exchange agreements. However, the Cayman Islands Government has made it clear that it will not enter into any agreements with countries that have legislation discriminating against the Cayman Islands. EU Savings Directive What has become known as the Savings Directive is part of a package of measures by the European Commission to tackle "harmful tax competition" in the European Union. It is designed to address the ability of "residents of Member States …. to avoid any form of taxation in their Member State of residence on interest they receive in another Member State". The current form of the Savings Directive is a compromise solution following the failure of Member States to agree on the original proposal for the imposition of withholding tax on interest payments (which would have had a serious effect on the Eurobond market in London). In implementation of the requirement that Member States "promote the adoption of the same measures" in their dependent or associated territories, the UK Government has committed its Caribbean dependent territories, including the Cayman Islands, to their adoption and has threatened to "legislate" for them. The Savings Directive requires the reporting of certain information relating to interest payments (including dividend payments by certain investment vehicles whose investments in debt instruments exceeds a certain percentage) to individuals resident in Member States. That information is to be provided by the paying agent (essentially, the last intermediary in a chain of intermediaries), who is also responsible for determining the residence of the payee. The Cayman Islands Government is concerned that any application of the Savings Directive to the Islands, without equivalent application to their competitors, will result in little benefit to the European Union at a disproportionate cost to the Islands. The UK Government is aware from its own regulatory impact assessment that implementation of the Savings Directive will result in significant additional costs to both the public and private sectors in the UK, and the same will undoubtedly be true in the Cayman Islands. The Cayman Islands has declined to commit to the implementation of the measures in the Savings Directive, and is now bringing legal proceedings to challenge the legality of certain aspects of the Savings Directive." From: http://www.escapeartist.com/OREQ21/Asset_Protection.html "If you read the press releases from the offshore jurisdictions that signed TIEAs, you’ll come away believing that they may be invoked only in the event of probable cause of tax fraud by a particular taxpayer. But that’s not what most of the treaties actually say. Instead, most TIEAs state that any information “foreseeably relevant or material to United States federal tax administration and enforcement with respect to the person identified” for investigation must be turned over to the IRS. Not “probable cause” of a criminal or even civil tax offense. Not even “reasonable suspicion.” Merely “foreseeably relevant.” U.S. courts have interpreted this authority as permitting TIEA information requests “even if the United States has no tax interest and no claim for U.S. taxes are potentially due and owing.” In other words, fishing expeditions into offshore accounts are explicitly permitted. The potential for abuse is obvious." On the phone with Cayman National Bank officer: "We will disclose your information if there is any court order to do so in the U.S." Press release for TIEA between U.S. and Cayman Islands, except document is missing: http://www.cimoney.com.ky/section/mediacentre/default.aspx?id=493 One location of same TIEA: http://www.oecd.org/dataoecd/20/17/35514531.pdf [edit] Government Main article: Politics of the Cayman Islands   The Cayman Islands are a British overseas territory, listed by the UN Special Committee of twenty-four as one of the last non-self governing territories. A fifteen-seat Legislative Assembly is elected by the people every four years to handle domestic affairs. Of the elected Members of the Legislative Assembly (MLAs), five are chosen to serve as government ministers in a cabinet headed by the governor. The head of government is the Leader of Government Business, which is currently The Honourable Kurt Tibbetts. A Governor is appointed by the British government to represent the monarch. The governor can exercise complete executive authority if they wish through blanket powers reserved to them in the constitution. They must give royal assent to all legislation, which allows them the power to strike down any law the legislature may see fit for the country. In modern times, the governor usually allows the country to be run by the cabinet, and the civil service to be run by the Chief Secretary, who is the Acting Governor when the Governor is not able to discharge his usual duties for one reason or another. The current governor of the Cayman Islands is Stuart Jack and the current Chief Secretary is The Honourable George McCarthy, OBE, JP.^ [edit] Taxation Caymanians and Caymanian companies are not subject to any form of direct taxation. However, an import tax of between 5% and 20% is levied on most imported goods. Import taxes on automobiles ranges from 27.5% to 40% for most vehicles while Hummers are taxed at 100% of their value. [edit] Education [edit] Primary and secondary schools The Cayman Islands Education Department operates state schools. Caymanian children are entitled to free primary and secondary education. Various churches and private foundations operate several private schools that offer American and British based studies starting in nursery to Year 13. [edit] Colleges and universities Grand Cayman is home to University College of the Cayman Islands, the only government run University on the island. The University College is located at 168 Olympic Way in Georgetown, Grand Cayman. The International College of the Cayman Islands which is located in Newlands about seven miles (11 km) east of George Town. The college was established in 1970 and offers Associate's, Bachelor's and Post Graduate degree programmes. Grand Cayman is also home to St. Matthew's University, which includes a medical school and a school of veterinary medicine. The Cayman Islands Law School (CILS), a branch of the University of Liverpool in the UK, is also based on Grand Cayman. Situated in George Town, the law school has been in operation since 1982. As taken from the student handbook, "The Law School provides tuition for both full and part-time programmes leading to the Bachelor of Law (Honours) Degree of the University of Liverpool and the qualification of Attorney-at-Law of the Cayman Islands, following successful completion of the postgraduate Professional Practicum Course (PPC) The Cayman Islands Civil Service College, a unit of Cayman Islands government organized under the Portfolio of the Civil Service, is also located in Grand Cayman. Co-situated with University College of the Cayman Islands in a building on the south side of the campus, the intent of the CICSC is offer both degree programs and continuing education units of various sorts. Further, the College is planned to develop as a government research centre. It opened in autumn 2007. [edit] Health care The Cayman Islands have a modern health care system. There are two hospitals in George Town, the government run George Town Hospital and the smaller, private Chrissie Tomlinson Memorial Hospital. Additionally, Faith Hospital is an eighteen-bed facility on Cayman Brac. The Government maintains a satellite clinic on Little Cayman. Health insurance is handled by private insurers and a government-run company (CINICO). There is no universal health coverage as in the UK. All employers are required under Law to provide Health Insurance for their employees (although the employee may be required to contribute 50% of the premium). Full time employees also contribute USD 10 every month to the "Indigent Fund" which helps cover care for the unemployed, elderly etc. Currently the islands lack facilities for cardiac catheterisation, though many feel the population is large enough to support the procedure. Various attempts to establish a cath lab in George Town Hospital have stalled. The Caymans lacked an MRI after one was destroyed during Hurricane Ivan, but in July 2007 a new unit was installed at the Chrissie Tomlinson Memorial Hospital. For divers and others in need of hyperbaric oxygen therapy, there is a two-person recompression chamber at George Town Hospital on Grand Cayman, run by Cayman Hyperbaric Services. The same organisation has built a hyperbaric unit at Faith Hospital in Cayman Brac, expected to be operational in January 2008. [edit] Work permits In order to work in the Cayman Islands as a non-citizen, a work permit is required. This involves passing a police background check and a health check. A prospective worker will not be granted a permit if certain medical conditions are present. Work permits are not issued after age 60. The Cayman Islands presently imposes a controversial ["rollover"] policy in relation to expatriate workers who require a work permit. Non-Caymanians are only permitted to reside and work within the Territory for a maximum of seven years (non-renewable) unless they satisfy the criteria of key employees. The policy has been the subject of some controversy within the press,[3] and concerns have been expressed that in the long term, the policy may damage the pre-eminence of the Cayman Islands as an offshore financial centre by making it difficult to recruit and retain experienced staff from onshore financial centres. Government employees are no longer exempt from this "rollover" policy according to this report in a local newspaper [12]. The Governor has decided to use his constitutional powers, which give him absolute control for the disposition of civil service employees, to determine which expatriate civil servants are dismissed after seven years service and which are not. This policy is enshrined in the Immigration Law (2003 revision), written by the UDP government, and subsequently enforced by the PPM government. Both governments agree to the term limits on foreign workers, and the majority of Caymanians also agree it is necessary to protect local culture, and heritage from being eroded by a large number of foreigners gaining residency/citizenship. [13] [edit] Military Main article: Military of the Cayman Islands The defence of the Cayman Islands is the responsibility of the United Kingdom. The Islands have their own police force, the Royal Cayman Islands Police Service. Regular off-shore marine patrols are conducted by the RCIP and Grand Cayman is a port of call for the United States Coast Guard. [edit] Foreign relations Main article: Foreign relations of the Cayman Islands The foreign relations of the Cayman Islands are largely managed from the United Kingdom, as the islands remain an overseas territory of the UK. However, the Government of the Cayman Islands often resolves important issues with foreign governments alone, without intervention from Britain. Although in its early days, the Cayman Islands' most important relationships were with Britain and Jamaica, in recent years, a relationship with the United States has developed. Though the Cayman Islands are involved in no major international disputes, they have come under some criticism due to the use of their territory for narcotics trafficking and money laundering. In an attempt to address this, the Government entered into the Narcotics Agreement of 1984 and the Mutual Legal Assistance Treaty of 1986 with the United States, in order to reduce the use of their facilities associated with these activities. In more recent years, they have stepped up the fight against money laundering, by limiting banking secrecy, introducing requirements for customer identification and record keeping, and requiring banks to cooperate with foreign investigators. Due to their status as an overseas territory of the UK, the Cayman Islands have no representation either on the United Nations, or in most other international organisations. However, the Cayman Islands still participates in some international organisations, being a full member of the Central Development Bank, International Olympic Committee and FIFA, an associate member of Caricom and UNESCO, and a member of a sub-bureau of Interpol. [edit] See also 1932 Cuba Hurricane Cayman Islands national football team The Scout Association of the Cayman Islands [edit] Footnotes ^ Hurricanecity.com ^ The FATF's 2000 report itself acknowledged that "the Cayman Islands has been a leader in developing anti-money laundering programmes throughout the Caribbean region. It has served as president of the CFATF, and it has provided substantial assistance to neighbouring states in the region. It has demonstrated co-operation on criminal law enforcement matters, and uncovered several serious cases of fraud and money laundering otherwise unknown to authorities in FATF member states." Inferences were drawn that the list had been drawn up as an attack on tax havens, and that the inclusion of a leading offshore financial centre was necessary for political purposes. ^ Law firms have been particularly upset by the recruitment difficulties that it has caused. [1] Other less well remunerated employment sectors have been affected as well.&#