Caymanian Compass Online Poll: Cayman Should Reject FATCA

Almost 58% of voters in a recent poll suggested Cayman should reject FATCA.  Don't get me wrong, my stomach says the same, but I'm going to try to explain why we cannot.

FATCA is a monster.  It will cost millions of dollars, considering all of the costs of compliance for each of the institutions.  But what would happen if Cayman had not signed up to it?

First, we need to clarify who we are referring to when discussing if Cayman should have rejected FATCA.  The Government was invited, and only joined with the support of the industry, so let's evaluate what would have happened if Government did not sign.

At this stage, I will simplify some concepts to make things easier.  So while some of the statements below may not be an exact explanation of FATCA, the consequences are correct, and after all, FATCA itself is several hundreds of pages.