Grand Cayman Islands

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Evans, David. 2004. "The $150 Billion Shell Game."  Bloomberg Markets
(August): pp. 61-7.
 61: "On a January afternoon in George Town, the capital of the Cayman
Islands, the sun beats down on three cruise ships anchored at Hog Sty
Bay.  Along the waterfront on Church Street stands a green-trimmed,
white, five-story office building called Ugland House.  From the
outside, there's no way to see it's the official address of 12,748
companies."
 62-3: "J.P. Morgan Chase & Co. estimated in a June study that $650
billion of profit earned abroad by U.S. companies over decades had
never been taxed by the U.S.  That's up from a cumulative total of $500
billion cited by J.P. Morgan in a study a year ago.  In 2001, almost
half of the money U.S. companies earned outside the U.S. -- 47 percent
-- was accounted for in offshore tax havens such as the Cayman Islands,
which has no corporate income tax, says Martin Sullivan, 45, a former
U.S. Treasury Department economist, citing Commerce Department data.
As a result, companies didn't have to pay the 35 percent U.S. corporate
income tax."
 62: "[Senator Carl Levin]: "When $250 billion of the $880 billion in
foreign bank deposits within U.S. banks is attributed to the Cayman
Islands, to connect the dots you've got to ask questions about the
extent of tax dodging in that country and other tax havens."
 63: "In a March report on financial crime and international law
enforcement, the U.S. State Department cited examples of transfer
pricing abuses, without naming companies.  It said one company claimed
to import dish towels from Pakistan for $153.72 each; another reported
it had imported briefs and panties from Hungary for $739.25 a dozen; a
third claimed it had paid $4,896 a unit for metal tweezers imported
from Japan.  The report also cited a company claiming to export toilet
bowls to Hong Kong for $1.75 each.  The State Department report called
those prices absurd and ridiculous."
 64: "The Caymans provide near-total financial secrecy for companies,
banks and accounts.  There are more than 500 banks and trust companies
with deposits of more than $1 trillion in the Cayman Islands, according
to the Cayman Monetary Authority.  That's more deposits than there are
in New York City, says Manhattan District Attorney Robert Morgenthau."
 64: "The Caymans are home to about 40,000 residents and an equal
number of foreign-owned companies."



--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
michaelperelman.wordpress.com