Caymans Condemned by G7

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HE Cayman Islands, a British overseas territory, is on a new blacklist of tax havens facing international sanctions, after failing to heed G7 warnings.

In a move certain to embarrass the government, which has promised action against havens, the Caymans are again among offshore centres accused of failing to curb the activities of drugs gangs and tax evaders.

Russia, Israel, Liechtenstein and the Bahamas are other jurisdictions whose banking secrecy laws are used by international criminals to hide their money, according to the Financial Action Task Force, an anti-laundering agency set up by the world's leading economic powers.

The taskforce first "named and shamed" the 15 rogue havens last June but, at the end of its first six-month review, none has made it off the blacklist.

They now face discriminatory action from the G7. Last week, Washington outlawed cash transfers to the south Pacific islands of Niue, considered to be a haven for Russian mafia money, and the Cook Islands.

Both jurisdictions are on the taskforce's list and the US and French governments have said similar measures will soon be introduced against other countries. Sunday Business has revealed that officials from the British Treasury, too, are working with G7 colleagues to frame legislation that will force individuals and companies to declare revenue in tax havens.

But the Cayman Islands' failure will increase pressure from international partners on the government, which last year commissioned accountants KPMG to conduct a review of financial services in its overseas territories. …