Cameron had previously called on all of the UK’s overseas territories to make efforts to increase transparency by signing up to a public register, which would document the owners behind shell companies in traditional tax havens.
However following Bermuda’s decision not to support the plan in November last year, the Cayman Islands have now followed suit.
According to The Times Wayne Panton, the financial services minister of the Cayman Islands, said that the territory was already adhering to international rules. Adding that laws would be passed to speed up the exchange of information on tax evasion, Panton explained that a consultation revealed that 81% of residents rejected such a register.
The news prompted fierce criticism in the UK, with the Treasury saying it was disappointed with the decision, while Public Accounts Committee (PAC) chair Margaret Hodge called for strict measures against companies that used the islands for tax avoidance purposes.
Hodge said, “This is hugely disappointing. It makes it ever more important for the UK to play a leading role in securing international co-operation to rewrite the international tax rules forcing the Cayman Islands to the table.
“The government should refuse to give a contract to any company that uses the Cayman Islands to avoid tax.”
A Treasury spokesperson added, “It’s important that businesses and individuals can find out who ultimately owns and controls the companies they are dealing with.”
“Whilst [the Cayman Islands] have committed to improving access to company ownership information, this falls far short of a register which would give overseas law-enforcement and tax authorities direct access to the information they need to tackle illegal finance and tax evasion globally.”