September 23, 2021

“In February 2020, the Tax Justice Network published its latest Financial Secrecy Index (FSI), which ranked the Cayman Islands as the leading jurisdiction for financial secrecy. To reach this conclusion, TJN had to downplay the Cayman Islands’ strong regulatory regime; stringent procedures to prevent and identify financial crimes; fully verified beneficial ownership registry for corporations; and adherence to international transparency standards that address tax evasion, money laundering and terrorism financing. 

The FSI is comprised of two main components: a global scale weight (GSW) and a secrecy score (SS). The GSW is a measure of the extent of a jurisdiction’s exports of financial services and the “Secrecy Score” is based on twenty “Key Financial Secrecy Indicators” (KFSI). TJN calculates the FSI score for each jurisdiction by multiplying the cube of the Secrecy Score by the cube root of the Global Scale Weight. The European Commission Joint Research Centre found this methodology to be very peculiar and results in an index that may not measure what it is supposed to measure.” 1

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NOTES

1 Read more on https://caymanfinance.ky/wp-content/uploads/2021/09/TJN-Financial-Secrecy-Index-Fact-Sheet-FINAL-4712447.pdf Accessed on September 23, 2021

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