The Cayman Islands - Paradise Regained?

The Cayman Islands's Commitments To The OECD

Like many offshore jurisdictions worldwide, the Cayman Islands spent the year 2000 under black clouds labelled 'FATF' and 'OECD', threatened with financial sanctions if it did not pull its socks up and conform to draconian rules which were much stiffer than any medicine the OECD's members were prepared to drink themselves.

Cayman managed not to be included on the OECD's infamous blacklist, but only by 'committing' itself to a string of reforms to improve transparency, remove discriminatory practices, and begin to exchange information with OECD member states about their citizens. All of this to be in place by 2005 at the latest.

The issue of the blacklists in mid-2000 was the high-water mark of the anti-offshore initiative, and since then the danger to offshore has receded step by step, as the jurisdictions themselves fought back against the OECD's bullying tactics, and open confrontation between the Commonwealth and the OECD began to appear a real possibility. Finally, the election of George Bush to the US presidency and the continuance of Republican domination of Congress, albeit weakened, sounded the death-knell for the OECD's initiative, although the last rites were not read until May 2001 when the US Treasury Department finally announced that it would not support the initiative other than in seeking limited information exchange agreements.

So it's now quite probable that the Cayman Islands won't have to implement all of its commitments to the OECD. On the other hand, Cayman took its FATF listing very seriously.

Based on its June 2000 review, FATF had stated that the primary 'deficiencies' of the Cayman Islands anti-money laundering regime involved customer identification, internal reporting and record keeping. All of these areas, in addition to related issues, have been addressed since that time. Legislative action has been taken to ensure that many of the guidelines, which existed previously as guidelines within a "Code of Practice," have since become legal requirements.

"We have worked diligently over the past few months to ensure that the regulations and laws of this jurisdiction meet or exceed both the 40 FATF recommendations and the 25 criteria adopted by the FATF in February 2000," said the Honourable Financial Secretary, Mr. George McCarthy early in 2001.

Cayman's New Legislation

The main areas of concern raised by the FATF, and legislative actions taken by the Cayman Islands, are outlined below with details of the actions undertaken to address them:

• Customer Identification & Record-keeping Rules: The Cayman Islands has compulsory legal requirements, with respect to relevant financial business, for customer identification, internal reporting and record-keeping in the Money Laundering Regulations 2000, which contain criminal sanctions. These regulations were passed on August 7, 2000 and took effect on September 1, 2000.
• Regulatory Cooperation: The Cayman Islands Monetary Authority has been enabled by the Monetary Authority (Amendment) (International Co-operation) Law 2000 to readily access and share information with overseas regulators, including information regarding the identity of customers in appropriate regulatory circumstances. This law was passed on July 14, 2000, and took effect on July 24, 2000.
• The Role of the Regulatory Authorities: The Cayman Islands Monetary Authority has reviewed its resources and has adopted a strategy for enhanced on-site inspections of licensees within a finite period.
• Suspicious Activity Reporting: A new criminal offence was added on July 14, 2000 by the Proceeds of Criminal Conduct Law (Amendment) (Money Laundering Regulations) Law 2000, making it a crime punishable by up to two years' imprisonment to fail in the course of business to report any suspicious transaction. This exceeds UK Law, which has such an offence only in relation to drugs and terrorism. In addition, the Money Laundering Regulations require by law that financial services providers have systems in place to secure the reporting of suspicious transactions, punishable on a breach by up to two years' imprisonment.
• Companies Management: All classes of management companies are subject to the Money Laundering Regulations 2000, and are therefore part of the anti-money laundering regime. The Money Laundering Regulations adopted in the Cayman Islands are identical to those of the UK, but their scope is wider due to the broader definition of relevant financial business.
• Appropriate changes were also made to the Companies Management Law and to the Banks and Trust Companies Law through the Companies Management (Amendment) (Access to Information) Law, 2000 and the Banks and Trust Companies (Amendment) (Access to Information) Law, 2000. 

In addition, on September 18, 2000, the Legislative Assembly passed revisions to the Monetary Authority Law regulating money transmitters, and transferring the regulation of building societies and credit unions from the Registrar of Companies to the Cayman Islands Monetary Authority.

"As one of the major international financial centres, we take our anti-money laundering regime very seriously," said Mr. McCarthy. "There is no reason to penalize the Cayman Islands by keeping us on a list of "non-cooperative" countries when our recognized track record on anti-money laundering efforts, as well as the recent legislative actions, do not warrant this continued classification."

The FATF's summary report of June 22, 2000, included a positive report on the history of the Cayman Islands, stating, "it has been a leader in developing anti-money laundering programs throughout the Caribbean region. It has served as president of the CFATF, and it has provided substantial assistance to neighboring states in the region.

"It has demonstrated exemplary cooperation on law enforcement matters, and uncovered several serious cases of fraud and money laundering otherwise unknown to authorities in FATF member states. In addition, it has closed several financial institutions on the basis of concerns about money laundering."

Implementation: The Acid Test

When the FATF met in January 2001 The Cayman government was disappointed to be told that it had to show that its new measures would be applied in practice, before it could be delisted. The FATF sent a nice letter, inviting the government to submit an implementation plan in February. The letter drew particular attention to the continued existence of anonymous accounts in the context of money-laundering. Of course, full application of 'KYC' principles to existing as well as to new accounts will resolve this problem.

A team from the FATF then visited the Cayman Islands at the beginning of May, to review the progress of implementation of the legislation which had already been judged to be more than sufficient to ensure removal of the country from the list. The government is now confidently expecting to be removed from the FATF's list of 15 'unco-operative' jurisdictions when the organisation meets again in June.

It will be interesting however to learn the outcome of the recent court action in which Ansbacher Cayman applied for permission to reveal bank account details to the Irish authorities, opposed by Caymanian service providers who want to uphold banking secrecy on the islands. Mr Justice Anthony Smellie will need to take account of the new mutual assistance laws passed in 2000. Here is a case in which there is clearly prima facie evidence of tax fraud on the part of Irish citizens - but tax evasion is no crime in the Cayman Islands, and has got nothing to do with money laundering. What will he decide? Will his decision match up to Treasury Secretary O'Neill's description of 'the core element that is our common goal: the need for countries to be able to obtain specific information from other countries upon request in order to prevent the illegal evasion of their tax laws by the dishonest few'? Is the FATF watching?

The Cayman Government certainly came up smelling of roses in March 2001 when the Grand Court froze more than US$33m in accounts held by Peru's former intelligence head Vladimero Montisinos and other prominent Peruvians. The Government had been asked for the freezing injunctions by the Peruvian Government, which intends to request the Court to order the return of the allegedly misappropriated money. But in that case the alleged crime would have been equally culpable in Cayman; and the transfers of cash do fall within normal definitions of money-laundering.

British FCO financial policy official Michael Kerney has said that the Bahamas, Panama, Liechtenstein and the Cayman Islands are good contenders to be removed from the FATF blacklist because they have adequately strengthened their anti-money laundering laws. He points out that it is important to the FATF in June, 2001, when reviewing the 2000/2001 list, to remove compliant countries in order to send the right signals to the remaining countries on the list, which includes Russia and Israel.

The KPMG Review Of The Cayman Islands

While the Cayman Islands was busy amending its legislation to conform with FATF requirements, KPMG was compiling its report to the UK Government on Bermuda and the Caribbean dependent territories, as a follow-up to the Edwards Report on the Isle of Man and the Channel Islands. The KPMG report, published late in 2000, while generally positive, highlighted a number of relatively minor legislative and administrative aspects requiring further adjustment:

• Legislation is required to cover the regulation of securities/investment business beyond that relating to members of the CSX and mutual fund administrators; this legislation is expected in mid-2001;
• The Companies Law lacks many of the features found in a modern piece of companies' legislation and is in need of review; KPMG recommended a review of it should include insolvency provisions, control over the issue of prospectuses, protection of the interests of minority shareholders, enforcement powers, the disqualification of directors and auditing of public companies;
• KPMG were particularly insistent that bearer shares should be banned, and the Cayman Islands intends to introduce legislation to do this later in 2001;
• The report also suggested that the forming of limited partnerships and the provision of registered offices for partnerships should become a regulated activity; that where the accounting records of a limited partnership are not kept at its registered office, the registered office should maintain a written record of where they are kept; and that the Registrar of Companies (who is also responsible for the registration of limited partnerships) should have strengthened enforcement powers;
• Improvements were also requested in the trusts sector, with an end to the current exclusion from regulation of those who undertake trust service provision as an individual or partnership, more thorough on-site and off-site inspection, the introduction of an enforceable supervisory code of practice for licence holders; and an enhancement of CIMA's enforcement powers.

Cayman, along with the other Overseas Territories covered by the report, had presented their responses to the British Goverment, by December 2000. The Economic Secretary to the Treasury, Melanie Johnson, said:

"The Overseas Territories have now explained how they plan to respond to KPMG’s recommendations. I have made it clear that the establishment of independent regulatory authorities, of effective powers to assist investigations by overseas authorities, and of any necessary enhancements to the laws and systems which combat money laundering are essential elements in establishing properly regulated financial centres in the Overseas Territories.

"These overdue measures need to be in place by the end of September 2001. The Overseas Territories themselves agreed when the review was published that these three priorities should substantively be in place by then, and I expect full delivery of their promises.

"I also expect to see KPMG’s other recommendations implemented by the end of 2001. This is essential if the Overseas Territories are to satisfy the international community and standard-setting bodies that they conduct their financial business according to international requirements. The UK fully supports a number of international initiatives which make it clear that counter measures will be taken against persistently non-compliant offshore financial centres."

Baroness Scotland, Parliamentary Under Secretary of State in the Foreign and Commonwealth Office responsible for the Overseas Territories, added:

"I welcome the high level commitments from the Caribbean Overseas Territories and Bermuda to address the KPMG recommendations. Financial services is a competitive sector, and the UK Government is keen that the Overseas Territories will attract quality business seeking a well-regulated environment, based on the prevailing rules, laws and good practice internationally.

"The UK Government will continue to provide advice and assistance to help the six Overseas Territories concerned to achieve full compliance with the principles and guidelines in the KPMG report. There will be a process of regular review and dialogue over the next twelve months to ensure the published implementation plans are substantially implemented by the end of 2001."

KPMG's work for the British Government has evidently given it considerable strength and credibility in Cayman from a regulatory point of view, so it was not surprising that the firm should announce in March 2001 that it had established a Regulatory Compliance Department.

KPMG's Managing Partner, Theo Bullmore, said in a news release that the need for the new department was born out of the "growing international and local regulatory expectations and demands."

Mr. Ken Bryant is the Senior Manager of the department, responsible for the department's consulting services, business development, and the fostering and maintaining of client relationships. He has overall management responsibility for the quality and delivery of the department's products, services, resources and staff.

Prior to joining KPMG, he held several senior Compliance Officer roles in which he was responsible for designing, writing, implementing, administering and monitoring effective compliance programs. In addition to being an MLRO, Mr. Bryant has also served in a regulatory capacity. His experience include the detection, investigation, and prevention of money laundering for a major offshore international banking center in the Caribbean.

Mr. Ian Comins, will serve as Manager to the department. He is charge of product development and is responsible for coordinating a dedicated team of consultants. He brings with him extensive practical experience, both from a regulator's point of view and also with industry perspective, and provides wide-ranging advice and assistance to his clients.

Prior to taking up this role, Mr. Comins held a similar position in the KPMG Isle of Man office. During his time there he assisted Financial Services Providers in implementing systems and procedures to meet regulatory demands, similar to those now being faced in the Cayman Islands. Before this, he worked for the regulator in the Isle of Man, where he helped implement new anti-money laundering guidance notes and regulatory focus visits.

The Cayman Islands office of KPMG, established in 1966, employs over 90 staff and was one of the first accounting firms on the island.

CIMA Tightens Up On The Banking Sector

The increased powers given to CIMA in 2000 were soon put to good use in the banking sector when the agency told the 62 'shell' banks remaining in the jurisdiction in February 2001 that they had nine months to open real offices and submit themselves to CIMA's inspection and reporting rules, or would lose their licenses.

The remaining 388 banks licensed in the Cayman Islands are all subsidiaries or branches of major banks that are subject to the supervision of both 'home' regulators in other jurisdictions, and CIMA as the 'host' regulator.

Cayman Islands Finance Secretary, George McCarthy, said recent reviews of the jurisdiction's financial sector had identified shell banks as "a potential risk to our system." He said: 'As a major international financial centre, it is our responsibility to maintain high standards, and we only wish to accept responsibility for banks which share this commitment'.

This move by the Cayman Islands came just as a US Senate subcommittee was holding a series of three hearings in Washington to investigate further the role of correspondent banking in money laundering, following the publication of a report in early February into the practice of US banks using shell or brass-plate banks in offshore financial centres such as the Cayman Islands and the Bahamas. The hearings led to some sensational headlines, but further criticism of Cayman was headed off by CIMA's visibly tough action.

In fact the Cayman Islands had stopped issuing licences for shell banks in 1992, but existing banks had been allowed to remain, without offices or staff, and offering no banking services locally.

"These private banks were subject to the standard requirements of providing CIMA with quarterly returns and annual audited financial statements, and to having annual prudential meetings with us. However, in line with evolving international standards, we felt that more was needed in order to provide the oversight expected by the Basel Committee guidelines," said Ms. Anna McLean, Head of Banking for the Cayman Islands Monetary Authority, referring to a set of internationally accepted banking practices.

"By requiring these 62 banks to have operating staff here, we can better secure our regulatory objectives," added Ms. McLean, noting that 16 of the 62 already met the new requirements. "Our membership on the Basel Committee's cross-border working group which is developing such standards - as well as our own internal analysis - indicated that this policy direction was timely."

The Cayman Islands In 2001

The years 1999 and 2000 saw substantial progress and success for the Cayman Islands financial sector on almost all levels.

17 new banks had been registered in the year to September 2000, taking the total of registered financial institutions to 465. In total, Cayman's 580 banks and trust companies have assets of roughly US$750 billion (this figure was $500 bn in 1999); there are 517 captive insurance companies (second only to Bermuda) with assets of US$15 billion (just $5bn in 1999); and 3,041 mutual funds with estimated assets of US$215 billion.

In 1998 there were about 40,000 registered offshore companies; by the end of 2000 this number had risen to nearly 60,000.

The Stock Exchange has also grown dramatically; it was founded only in 1997, by November 1999 had more than 190 listings with market capitalisation of US$17 bn, while at the end of 2000 there were nearly 400 listings with market capitalisation of £35bn.

Sources in the Caymans' banking industry say the FATF and OECD initiatives against tax havens have had only a marginal affect on the territory's banking business, but have affected some smaller trusts that deal with just a few clients.

How far has the massive publicity affected the Cayman Islands as a whole? Financial Secretary George McCarthy, who has been at odds with the FATF and OECD initiatives for the past few years, said that the latest figures support the government's position that the Cayman Islands is a clean jurisdiction with supporting infrastructure and anti-money laundering legislation. He said: 'I believe these figures demonstrate the confidence in the Cayman Islands people have as a jurisdiction of choice for quality business.'

And yet all is not well. To quote from local web-site Cayman Net News in March 2001:

'If there is one vision which is conjured up in the average 'Cayman watcher's' mind - locally and overseas - it is that of a place that is vigorous in every way and that it's 'business as usual'.

'Oddly though, in recent days, the very people and entities accustomed to touting the virtues of Cayman's robust business climate, are silent regarding the state of the economy, which continues to slide.

'We refer to the associations representing the banks, off-shore companies and insurance management companies, accountants, the Cayman Islands Chamber of Commerce and the two tourism associations, which have agreed to merge at the end of this month.

'Quietly, ever so quietly, a surprising number of residents are making plans to depart from the Cayman Islands, citing a continuing drop in business, and no hope for them and their families being accepted as residents - or getting security of tenure - after having spent over 10 years or more in this country.'

Cayman Net News went on to say that business leaders felt negative, that registration renewals were flagging, and that the territory's financial situation was parlous. The article compared the Cayman Islands unfavourably with Bermuda and other offshore jurisdictions which, it says, have spent hundreds of millions of dollars on developing e-commerce facilities in order to capture the next wave of offshore investment.

The article reflected a periodic upsurge of concern about the age-old problem faced by many offshore jurisdictions: how to balance the interests of indigenous residents, many of whom lack the skills needed for a modern, competitive business sector, with the overall health of the economy which if left to itself is always inclined to suck in skilled and wealthy foreigners, often at the cost of local jobs.

Immigration: A Blessing Or A Curse?

Scare stories about the imminent departure of long-term residents who are unable to secure local status are perhaps just an anecdotal response to locally-inspired horror stories about waves of immigrants who take jobs away from Caymanians. There was general surprise when a recent census showed the population to be only 40,000. Estimates going up to 60,000 had been bandied about - perhaps especially by those who wanted to protect local jobs.

The truth is that the Islands can't do without immigrant labour, and that the historical balance between locals and immigrants has broken down. This is recognised by the authorities, both at the level of labour law, and at the level of residential status: only 11,000 of the 40,000 population are entitled to vote.

In an interview, the Governor-General, His Excellency, Mr. Peter John Smith, CBE, said: " I would welcome a more inclusive approach to the whole status concept. I know there are various elements that are very passionate about it, but there are so many people, with what I would call strong Caymanian connections that don't get status or absorbed into the system, and natural justice must have a problem with that."

However, it's thought that the administration won't be able to address the immigration issue with legislation until much later in 2001. In the meantime, it's expected that the under-resourced Immigration Department will be strengthened.

The Chamber Of Commerce Immigration/Labour Task Force

Dissatisfaction with the course of the economy is keenly felt among local businesses, and the Cayman Islands Chamber of Commerce created an Immigration/Labour Task Force to study the twin problems of immigration and inward investment.

In early 2001 the Task Force submitted to its members a comprehensive list of recommendations on whether further inward foreign investment in various industries in the Cayman Islands was desirable. Broadly, the Chamber is in favour of encouraging foreign investment, and admitted that many of its recommendations would be thought controversial, given the general bias on the Islands towards the favouring of domestic players, which it is tacitly blaming for current economic problems.

The Chamber noted that tourism and financial services were both showing signs of weakness, recommending in a apparent criticism of past Governmental domination of the development planning process that the private sector should hold the balance of power on organisations such as the Trade & Business Licensing Board and the Immigration Board.

The Task Force thinks that foreign institutions and incoming businesses should be encouraged, and that the Government needs to develop an economic policy that will define an appropriate future strategy for the development of the Cayman Islands.

However, the Chamber Task Force felt that the primary issue for financial services was not related to investment but to the supply of labour:

"The limited size of the Caymanian labour pool results in the importance of foreign labour to support these businesses. Yet we have a political and social climate which is concerned by the number of foreigners in employment in Cayman."

The Task Force says that the Islands' existing legislation and regulation pertaining to foreign investment are adequate, and it sees no need for the control of various domestic sectors such as water sports, real estate agencies and management companies, restaurants and public transport through a licensing process. It thinks that the 60/40 local business ownership rule works well enough on its own.

However, the Chamber felt that an Investment and Business Development Council should be established with appropriate funding from Government and the private sector. "To encourage foreign investors there must be a body which can provide all the relevant information and a consistent approach to potential investors."

The Task Force also felt that restrictions on foreign ownership of real estate needed to be clarified, and probably relaxed in order to encourage further inward investment in that sector.

The New Caymanian Government

General elections held in the Cayman Islands on 8th November 2000 saw a high 83% turnout that replaced the previous governmental team, widely felt to be ineffective and divisive. Day-to-day government in the Cayman Islands is in the hands of the 8-member Executive Council, consisting of five Ministers who as elected politicians are nominated to the Council, and three members appointed by the Governor, including the Financial Secretary, currently George McCarthy.

The five new Ministers, who share out portfolios between them, are:

• Kurt Tibbetts, effectively Prime Minister as Leader of Government Business; 
• McKeeva Bush, Minister for Tourism, Environment and Transport and Deputy Leader of Government Business; 
• Roy Bodden, Minister for Education, Human Resources and Culture; 
• Linford Pierson, Minister for Health and Information Technology; and 
• Edna Moyle, Minister for Community Development, Women's Affairs, Youth and Sports.

The biggest of many challenges facing the new government was the country's fast-deteriorating budgetary situation. Cost-cutting measures were rapidly introduced in every department.

"Government was trying to streamline expenses to be in line with revenue", said Mr. McCarthy. "So as demand against the government continues to grow, obviously we have to look at the expenditure side of the budget very carefully because, from 1994 to the end of 2000, revenues have increased by 85 percent but the expenditure side has increased by 100 percent."

"I cannot see how this will be remedied," said Mr McCarthy, who has the difficulty that a very high proportion of the elements making up the expenditure-side of the budget are not programmes that can be easily removed, or cut.

His budget for the 2001/2002 financial year has $360m of expenditure and is balanced by writing in $20m of new revenue from additional taxation, although it is not yet clear how this will be raised. The Cayman Islands will also borrow $55m internationally.

One nettle which the new administration has to grasp is the problem of perennially loss-making Cayman Airways.On Friday, March 9, 2001, the Governor of the Cayman Islands in his Throne Speech to the Legislative Assembly, raised the issue of the financially-troubled national airline. Cayman Airways is "a national concern" and "an independent audit has been commissioned." he said. "The goal is to find the best business model to bring about a sustainable profitability at the national airline." It will be a test of the government's mettle to see whether they privatise or sell the airline, which is presumably not viable as an independent entity - and there is probably not the money to keep it as a symbol of national identity.

The underlying budget problem for the Cayman Islands is the narrowness of its income base, with 40% of all revenues coming from import duties. The government is obviously unwilling to introduce direct taxation, whose absence is the cornerstone of its success in attracting financial services; but any further increase in import duties would have a directly inflationary effect, and would be immediately self-defeating.

The Cayman Islands enormous financial services sector currently contributes only 14% approximately of government revenues. Between a rock and a hard place, the government will probably have no choice but to squeeze some further contributions from it.

George McCarthy ended his budget speech by saying: "A time of difficulty can be viewed as a time of danger or opportunity; the Government views the current (economic) situation as a time of opportunity. An opportunity to correct the fundamental challenges in public finance, an opportunity to encourage innovation in public services... and an opportunity to set the stage for meaningful economic opportunities for all Caymanians... and residents."

One major agenda item for Mr McCarthy and the Caymans generally is the question of monetary policy. CIMA, the Cayman Islands Monetary Authority, which started life as a government department, is being given its independence in 2001, and will no doubt function very effectively as an independent regulator for financial services. But there is a school of thought that says it should instead or as well become a Central Bank, operating a system of reserve requirements with Cayman's enormous banking sector, leading to the possible removal of the currency peg and the creation of a satisfactory public debt market. Proponents of this option say it would help to reduce structurally high interest rates, which add an extra turn to the pressure on public finances, especially now that the Government is to increase its borrowings significantly.

A New Industry For The Cayman Islands?

One thing that is agreed on by virtually all commentators on the Caymanian scene is the need to move forward rapidly with the development of an e-commerce sector; and the crucial importance of telecommunications infrastructure in doing so.

Said one correspondent writing to Cayman Net News:

"Grand Cayman itself could fill all of its see-through buildings in a matter of months with the specialty of e-commerce. The specialties would be data transfer, broad band streaming (the up and coming technology requirement for the next 12 years of its infancy), credit card authorisations globally, credit/debit card verifications (ie, authentication of a new technology to come out in about six months), global Internet banking, data base research centre and hosting of new Web commercial sites."

For all that the government is doing to encourage the teaching of technology in schools, and the passage of an Electronic Transactions Act in 2000 (regulations under the Act are awaited in 2001) it has been fairly passive in encouraging e-commerce in other respects, and nowhere more so than in its handling of the Cable and Wireless monopoly.

Different Caribbean jurisdictions (almost all of which inherited Cable and Wireless as a monopoly telecommunications supplier from Britain's days as a colonial power) have approached C & W in different ways. Five Eastern Caribbean states (St. Kitts, St. Lucia, Grenada, St. Vincent and Dominica) banded together after C & W threatened to pull out of St Lucia altogether, and have now agreed a phased transition to a liberalised market; Barbados also has agreed a two-year transition period in a less confrontational way.

In the jurisdictions, including the Cayman Islands, where governments have failed to challenge the Cable & Wireless monopoly, the company has usually been prepared to allow competition in the domestic Internet market, in exchange for the continuance of its international monopoly. But that is a short-sighted policy for governments to follow because it hobbles the global chances of local e-commerce operations. That is the situation in which the Cayman Islands now finds itself, and it urgently needs to follow its competitor jurisdictions in legislating away the C & W monopoly - to which the company is evidently resigned, even if it doesn't say so out loud.

On the plus side, C & W is landing the Maya fibre optic cable on Cayman, which will at least provide good connectivity - if anyone can afford to use it! Meanwhile Cable and Wireless have announced redundancies among their Cayman work-force, while they move some call-centre operations to Jamaica - so it's clear what they think of Cayman's e-commerce future.

Perhaps the Cayman government does now understand the pressing urgency of e-commerce development. In his 'speech from the throne' this year, the Governor said that information technology will be a priority in the year 2001 as government tries to keep the Cayman Islands on a forward trend. According to Mr. Smith, the Cayman Islands is taking IT "very seriously and is well placed to take full advantage of its exciting possibilities".

"We live in a busy and impatient world with decisions and demands being made at a relentless rate," he said, "Fortunately, one of the keys to survival and indeed success comes in the shape of IT."