The Cayman Islands have recently been involved in various international initiatives which aim to raise professional standards and requirements in the offshore financial services industry. These initiatives include improving the anti-money laundering regimes, including formal know-your-customer requirements, providing increased co-operation with other jurisdictions and mandatory reporting of suspected money-laundering. This is a continuation of trends that started some years ago, and which began with the Mutual Legal Assistance Treaty with the USA.
The OECD produced a report in 1998 on what it regarded as "harmful tax competition", setting out what it regarded as harmful tax practices and harmful preferential tax regimes. The report made 19 wide-ranging recommendations to counteract such practice. In June 2000 the OECD published a list of 35 "tax havens" which would be subject to sanctions if they failed to comply with the OECD recommendations. The Cayman Islands were one of
