Cayman Islands Governor, Peter J. Smith, is to sign an agreement today with Treasury Secretary, Paul O'Neill, and British Ambassador to the U.S., Christopher Meyer, which will open the vaults of secrecy on Cayman Islands bank accounts.
Henceforth, the Cayman Islands will share information with the U.S. government, including the IRS, in an effort to track down tax evaders.
It is estimated that $800 billion is on deposit in Cayman banks - more than twice the amount on deposit in all New York banks combined. In U.S. Senate hearings earlier this year it was determined that more than $70 billion in tax revenue is lost each year due to money being concealed in offshore locations, including the Cayman Islands.
The Bush administration is working to overhaul tax structures and negotiate treaties with countries known to be tax havens, and is expected to have treaties in place within a year with half of the 35 countries recognized as tax havens by the Paris-based Organisation for Economic Cooperation and Development (OECD).
Many tax haven countries, including Antigua, Barbuda, the British Virgin Islands, Barbados, and Panama, have already agreed to treaties to avoid being included on the OEDC list.