Cayman Islands Explained

Conventional Long Name:Cayman Islands
Demonym:Caymanian
Common Name:the Cayman Islands
National Motto:"He hath founded it upon the seas"
National Anthem:God Save the Queen
Official Languages:English
Capital:George Town
Latd:19
Latm:20
Latns:N
Longd:81
Longm:24
Longew:W
Largest City:capital
Ethnic Groups:40% Mulatto, 20% European 20% West African, 20% other[1]
Largest District:George Town
Government Type:British Overseas Territory
Leader Title1:Queen
Leader Name1:Queen Elizabeth II
Leader Title2:Governor
Leader Name2:Stuart Jack
Leader Title3:Leader of
Government Business
Leader Name3:
Kurt Tibbetts
Area Km2:260
Area Sq Mi:100.4
Area Rank:207th
Area Magnitude:1 E8
Percent Water:1.6
Population Estimate Year:2006
Population Estimate:70,000[2]
Population Estimate Rank:195th
Population Census:40,786
Population Census Year:1999
Population Density Km2:139.5
Population Density Sq Mi:364.2
Population Density Rank:63rd
Gdp Ppp Year:2004
Gdp Ppp Rank:n/a
Gdp Ppp Per Capita:32,300
Gdp Ppp Per Capita Rank:n/a
Hdi Year:2003
Hdi:n/a
Hdi Rank:unranked
Hdi Category:NA>
Sovereignty Type:Creation
Established Event1:Split from Jamaica
Established Date1:1962
Currency:Cayman Islands dollar
Currency Code:KYD
Utc Offset:-5
Time Zone Dst:not observed
Utc Offset Dst:-5
Drives On:left
Cctld:.ky
Calling Code:1 345

The Cayman Islands (or) are a British overseas territory located in the western Caribbean Sea, comprising the islands of Grand Cayman, Cayman Brac, and Little Cayman. The territory is a major offshore financial centre in the Caribbean.

History

See main article: History of the Cayman Islands. The Cayman Islands were sighted by Christopher Columbus, on 10 May 1503 on his disastrous fourth and final voyage to the New World. He named them Las Tortugas after the numerous sea turtles there. The first recorded English visitor to the islands was Sir Francis Drake, who landed there in 1586 and named them the Cayman Islands after the Neo-Taino nations term (caiman) for alligator.

The first recorded permanent inhabitant of the Cayman Islands, Isaac Bodden, was born on Grand Cayman around 1661. He was the grandson of the original settler named Bodden who was probably one of Oliver Cromwell's soldiers at the taking of Jamaica in 1655.

The islands, along with nearby Jamaica, were captured by, then ceded to England in 1670 under the Treaty of Madrid. They were governed as a single colony with Jamaica until 1962 when they became a separate British Overseas Territory and Jamaica became an independent Commonwealth realm.

The largely unprotected at sea level island of Grand Cayman was hit by Hurricane Ivan on 11- 12 September 2004, which destroyed many buildings and damaged 90% of them. Power, water and communications were all disrupted in some areas for months as Ivan was the worst hurricane to hit the islands in 86 years. However, Grand Cayman forced a major rebuilding process and within two years its infrastructure was nearly returned to pre-Ivan levels. The Cayman Islands have the dubious honour of having experienced the most hurricane strikes in history. Due to the proximity of the islands, more hurricane and tropical systems have affected the Cayman Islands than any other region in the Atlantic basin (brushed or hit every 2.23 years).[3] The Cayman Islands enjoy a high global standard of living fully dependent upon tourism and banking.

Geography

See main article: Geography of the Cayman Islands.

The Cayman Islands are located in the western Caribbean Sea. They are the peaks of a massive underwater ridge, known as the Cayman Trench, standing 8,000 feet (2,400 m) from the sea floor, which barely exceeds the surface. The islands lie in the northwest of the Caribbean Sea, south of Cuba and west of Jamaica. They are situated about 400 miles (650 km) south of Miami, 180 miles (300 km) south of Cuba, and 195 miles (315 km) northwest of Jamaica. Grand Cayman is by far the biggest, with an area of 76 square miles (197 km²). The two "Sister Islands" of Cayman Brac and Little Cayman are located about 80 miles (130 km) east of Grand Cayman and have areas of 14 square miles (36 km²) and 10 square miles (25.9 km²) respectively.

All three islands were formed by large coral heads covering submerged ice age peaks of western extensions of the Cuban Sierra Maestra range and are mostly flat. One notable exception to this is The Bluff on Cayman Brac's eastern part, which rises to 140 feet (42.6 m) above sea level, the highest point on the island.

Cayman avian fauna includes two endemic subspecies of Amazona parrots: Amazona leucocephala hesterna, or Cayman Brac Parrot, native only to Cayman Brac, and Amazona leucocephala caymanensis or Grand Cayman Parrot, which is native only to Grand Cayman. Another notable fauna is the endangered Blue Iguana, which is native to Grand Cayman. There is also the agouti and the Booby Birds on Cayman Brac.

Demographics

See main article: Demographics of the Cayman Islands.

See main article: Roman Catholic Mission Sui Iuris of Cayman Islands.

The Cayman Islands have more registered businesses than they have people.[4] The latest population estimate of the Cayman Islands is about 52,000 as of 2006, representing a mix of more than 100 nationalities. Out of that number, about half are of Caymanian descent. About 60% of the population is of mixed race (mostly mixed African-European). Of the remaining 40%, about half are of European descent and half are of African descent. The islands are almost exclusively Christian, with large number of Presbyterians and Catholics. Caymanians enjoy the highest standard of living in the Caribbean. The vast majority of the population resides on Grand Cayman. Cayman Brac is the second most populated with about 1,200 residents, followed by Little Cayman with around 200 permanent residents.[5]

The capital and major city of the Cayman Islands is George Town, which is located on the south west coast of Grand Cayman.

Economy

See main article: Economy of the Cayman Islands.

With an average income of around $42,000, Caymanians enjoy the highest standard of living in the Caribbean. According to the CIA World Factbook, the Cayman Islands GDP per capita is the 12th highest in the world.[6] The islands print their own currency, the Cayman Islands Dollar (KYD), which is pegged to the U.S. dollar at a fixed rate of 1 KYD = 1.20 USD.[7]

The government's primary source of income is indirect taxation - there is no income tax or capital gains tax or corporation tax. An import duty of 5% to 20% is levied against goods imported into the islands. Few goods are exempt; notable examples include books, cameras and infant formula. The government charges licensing fees to financial institutions that operate in the islands as well as work permit fees for expatriate employees ranging from around US$500 for a clerk to around US$20,000 for a CEO.

Tourism

Tourism accounts for 70-75% of the annual GDP of the Cayman Islands. Of the millions of tourists that visit the islands annually, 99% visit Grand Cayman. George Town also serves as a major cruise ship port, which brings in 4,000 to 22,000 tourists a day, five days a week, depending on the number of ships in port.

One of Grand Cayman's (GCM) main attractions is the world-famous Seven Mile Beach on which a number of the island's hotels and resorts are located. Seven Mile Beach is regarded by many as one of the best beaches in the world. Historical sites in GCM such as Pedro St. James Castle in BoddenTown also attract visitors. The Sister Islands - Little Cayman[8] and Cayman Brac[9] - also supply their own unique charm.

The Cayman Islands is regarded as one of the world's best scuba diving destinations because of its crystal-clear waters and pristine walls. Cayman Brac and Little Cayman are also elite SCUBA dive destinations. There are several snorkeling locations where tourists can swim with stingrays including the popular Stingray City, Grand Cayman. Divers find two shipwrecks off the shores of Cayman Brac particularly interesting including the MV Keith Tibbetts.

Other Grand Cayman tourist attractions include the Ironshore landscape of Hell, the 23acres marine theme park Boatswain's Beach, also home of the Cayman Turtle Farm, the production of gourmet sea salt, and the Mastic Trail, a hiking trail through the forests in the centre of the island. The NationalTrust for the Cayman Islands provides guided tours weekly on the Mastic Trail and other locations[10] . On Cayman Brac, a lighthouse and a few local museums are tourist draws. Little Cayman's wildlife attracts nature lovers, especially bird watchers in search of the island's Red-footed Booby population.

Art and Culture are other features of the Cayman Islands that attract international attention. The National Museum and National Gallery preserve contemporary and dated art works of local and international talent. A Cultural History Exhibition is displayed within the museum, and teaches patrons about historical customs and traditions native to the Cayman Islands. The Gallery sponsors eight exhibitions every year and is located in the Harbour Place in George Town.

See also: Scuba diving in the Cayman Islands.

Financial services industry

The Cayman Islands are a major international financial centre. With the biggest sectors being "banking, hedge fund formation and investment, structured finance and securitization, captive insurance, and general corporate activities."[11] Regulation and supervision of the financial services industry is the responsibility of the Cayman Islands Monetary Authority (CIMA).

The Cayman Islands are the fifth-largest banking centre in the world;[12] with $1.5 trillion in banking liabilities.[11] They are home to 279 banks (as of June 2008), 19 of which are licensed to conduct banking activities with domestic (Cayman based) and international clients, the remaining 260 are licensed to operate on an international basis with only limited domestic activity.[13]

One reason for the Cayman Islands’ success as an offshore financial centre has been the concentration of top-quality service providers. These include leading global financial institutions (incl. UBS and Goldman Sachs), over 80 administrators, leading accountancy practices (incl. the Big Four auditors), and offshore law practices (incl. Maples & Calder and Ogier).[14]

Since the introduction of the Mutual Funds Law in 1993, which has been copied by jurisdictions around the world, the Cayman Islands have grown to be the world’s leading offshore hedge fund jurisdiction.[14] In June 2008 it passed 10,000 hedge fund registrations, and over the year ending June 2008 CIMA reported a net growth rate of 12% for hedge funds.[15]

Starting in the mid-late 1990s offshore financial centres, such as the Cayman Islands, came under increasing pressure from the OECD for their allegedly harmful tax regimes, where the OECD wished to prevent low-tax regimes from having an unfair advantage in the global marketplace, and thus be harmful to the economies of more developed nations. The OECD threatened to place the Cayman Islands and other tax havens on a "black list" and impose sanctions against them.[16] However the Cayman Islands successfully avoided being placed on the OECD black list in 2000 by committing to regulatory reform to improve transparency and begin information exchange with OECD member countries about their citizens.[16]

The Cayman Islands had previously (briefly) appeared on the FATF Blacklist in 2000, although its listing was thought to be harsh, and was criticised at the time.[17]

In 2004, under pressure from the UK, the Cayman Islands agreed in principle to implement the European Union Savings Directive (EUSD), but only after securing some important benefits for the financial services industry in the Cayman Islands. As the Cayman Islands are not subject to EU laws, the implementation of the EUSD is by way of bilateral agreements between each EU member state and the Cayman Islands. The government of the Cayman Islands agreed on a model agreement, which set out how the EUSD would be implemented with the Cayman Islands.[18]

A report published by the International Monetary Fund (IMF), in March 2005, assessing supervision and regulation in the Cayman Islands' banking, insurance and securities industries, as well as its money laundering regime, recognised the jurisdiction's comprehensive regulatory and compliance frameworks. "An extensive program of legislative, rule and guideline development has introduced an increasingly effective system of regulation, both formalising earlier practices and introducing enhanced procedures," noted IMF assessors. The report further stated that "the supervisory system benefits from a well-developed banking infrastructure with an internationally experienced and qualified workforce as well as experienced lawyers, accountants and auditors," adding that, "the overall compliance culture within Cayman is very strong, including the compliance culture related to AML (American-money laundering) obligations."[19]

In 2000 Financial Action Task Force on Money Laundering (FATF) put The Cayman Islands on its “black list” of Non-Cooperative Countries and Territories (NCCTs). Specifically, FATF noted in its annual report released in June 2000 that “The Cayman Islands does not have any legal requirements for customer identification and record keeping. Even if in the absence of a mandatory requirement, financial institutions were to identify their customers, supervisory authorities cannot, as a matter of law, readily access information regarding the identity of customers. Moreover, the supervisory authority places too much reliance on home country supervisors’ assessment of management of bank branches” [ANNEX A, paragraph 20, p.4 of the report, http://www.fatf-gafi.org/dataoecd/13/42/34328015.pdf].

Government

See main article: Politics of the Cayman Islands. The Cayman Islands are a British overseas territory, listed by the UN Special Committee of Twenty-Four as one of the last non-self governing territories. A fifteen-seat Legislative Assembly is elected by the people every four years to handle domestic affairs. Of the elected Members of the Legislative Assembly (MLAs), five are chosen to serve as government ministers in a cabinet headed by the governor. The head of government is the Leader of Government Business, which is currently The Honourable Kurt Tibbetts.

A Governor is appointed by the British government to represent the monarch. The governor can exercise complete executive authority if they wish through blanket powers reserved to them in the constitution. They must give royal assent to all legislation, which allows them the power to strike down any law the legislature may see fit for the country. In modern times, the governor usually allows the country to be run by the cabinet, and the civil service to be run by the Chief Secretary, who is the Acting Governor when the Governor is not able to discharge his usual duties for one reason or another. The current governor of the Cayman Islands is Stuart Jack and the current Chief Secretary is The Honourable George McCarthy, OBE, JP.

The defence of the Cayman Islands is the responsibility of the United Kingdom. The Royal Cayman Islands Police Service provides police services in the country. The Cayman Islands Cadet Corps was formed in March 2001.

Taxation

There is no direct taxation imposed on Caymanians and Cayman Islands companies. The government receives the majority of its income from indirect taxation. A 20% duty is levied against imported goods. Some items are exempted like baby formula, books and cameras. Duty on automobiles depends on the class and make of the model; duty can reach up to 40% for expensive models. Financial institutions that operate in the islands are charged a flat licensing fee by the government. A 10% government tax is placed on all tourist accommodations in addition to the small fee each tourist pays upon getting on the island.

Education

Primary and secondary schools

The Cayman Islands Education Department operates state schools. Caymanian children are entitled to free primary and secondary education. Various churches and private foundations operate several private schools that offer American and British based studies starting from nursery up to A Levels.

Colleges and universities

Grand Cayman is home to University College of the Cayman Islands, the only government run college on the island.[20] The University College is located in George Town on Grand Cayman. The International College of the Cayman Islands is a private college and is located in Newlands, Grand Cayman about seven miles (11 km) east of George Town. The college was established in 1970 and offers Associate's, Bachelor's and Post Graduate degree programmes.[21] Grand Cayman is also home to St. Matthew's University, which includes a medical school and a school of veterinary medicine.[22] The Cayman Islands Law School (CILS)], a branch of the University of Liverpool in the UK, is also based on Grand Cayman.[23] Situated in George Town, the law school has been in operation since 1982.

The Cayman Islands Civil Service College, a unit of Cayman Islands government organised under the Portfolio of the Civil Service, is also located in Grand Cayman. Co-situated with University College of the Cayman Islands in a building on the south side of the campus, the intent of the CICSC is offer both degree programmes and continuing education units of various sorts. Further, the college is planned to develop as a government research centre. It opened in autumn 2007.

Health care

The Cayman Islands have a modern health care system. There are two hospitals in George Town, the government run George Town Hospital and the smaller, private Chrissie Tomlinson Memorial Hospital. Additionally, Faith Hospital is an eighteen-bed facility on Cayman Brac. The Government maintains a satellite clinic on Little Cayman.

Health insurance is handled by private insurers and a government-run company (CINICO). There is no universal health coverage as in the UK. All employers are required under Law to provide Health Insurance for their employees (although the employee may be required to contribute 50% of the premium). Full time employees also contribute US$10 every month to the "Indigent Fund", which helps cover care for the unemployed, elderly, and other groups in need of monetary assistance.

Currently the islands lack facilities for cardiac catheterisation, though many feel the population is large enough to support the procedure. Various attempts to establish a cath lab in George Town Hospital have stalled. The Cayman Islands lacked an MRI after one was destroyed during Hurricane Ivan, but in July 2007 a new unit was installed at the Chrissie Tomlinson Memorial Hospital.

For divers and others in need of hyperbaric oxygen therapy, there is a two-person recompression chamber at George Town Hospital on Grand Cayman, run by Cayman Hyperbaric Services. The same organisation has built a hyperbaric unit at Faith Hospital in Cayman Brac.

Work permits

In order to work in the Cayman Islands as a non-citizen, a work permit is required. This involves passing a police background check and a health check. A prospective worker will not be granted a permit if certain medical conditions are present. Work permits are not issued after age 60. If you are an individual on special work a permit may be granted.

The Cayman Islands presently imposes a controversial "rollover" policy in relation to expatriate workers who require a work permit. Non-Caymanians are only permitted to reside and work within the Territory for a maximum of seven years (non-renewable) unless they satisfy the criteria of key employees. The policy has been the subject of some controversy within the press. Law firms have been particularly upset by the recruitment difficulties that it has caused.[24] Other less well remunerated employment sectors have been affected as well. Concerns about safety have been expressed by diving instructors and realtors have also expressed concerns. Others support the rollover as necessary to protect Caymanian identity in the face of large immigration of expatriate workers.[25]

Concerns have been expressed that in the long term, the policy may damage the pre-eminence of the Cayman Islands as an offshore financial centre by making it difficult to recruit and retain experienced staff from onshore financial centres. Government employees are no longer exempt from this "rollover" policy according to this report in a local newspaper.[26] The governor has decided to use his constitutional powers, which give him absolute control for the disposition of civil service employees to determine which expatriate civil servants are dismissed after seven years service and which are not.

This policy is enshrined in the Immigration Law (2003 revision), written by the UDP government, and subsequently enforced by the PPM government. Both governments agree to the term limits on foreign workers, and the majority of Caymanians also agree it is necessary to protect local culture and heritage from being eroded by a large number of foreigners gaining residency and citizenship.[27]

Military

The defence of the Cayman Islands is the responsibility of the United Kingdom. The Islands have their own police force, the Royal Cayman Islands Police Service. Regular off-shore marine patrols are conducted by the RCIP and Grand Cayman is a port of call for the United States Coast Guard.

Foreign relations

See main article: Foreign relations of the Cayman Islands. The foreign relations of the Cayman Islands are largely managed from the United Kingdom, as the islands remain an overseas territory of the UK. However, the Government of the Cayman Islands often resolves important issues with foreign governments alone, without intervention from Britain. Although in its early days, the Cayman Islands' most important relationships were with Britain and Jamaica, in recent years, a relationship with the United States has developed.

Though the Cayman Islands are involved in no major international disputes, they have come under some criticism due to the use of their territory for narcotics trafficking and money laundering. In an attempt to address this, the Government entered into the Narcotics Agreement of 1984 and the Mutual Legal Assistance Treaty of 1986 with the United States, in order to reduce the use of their facilities associated with these activities. In more recent years, they have stepped up the fight against money laundering, by limiting banking secrecy, introducing requirements for customer identification and record keeping, and requiring banks to cooperate with foreign investigators.

Due to their status as an overseas territory of the UK, the Cayman Islands have no representation either on the United Nations, or in most other international organisations. However, the Cayman Islands still participates in some international organisations, being a full member of the Central Development Bank, and an associate member of Caricom and UNESCO, and a member of a sub-bureau of Interpol.

Sport

Cricket is the national and most popular sport. [28]

Rugby union in the Cayman Islands is a developing sport, and has its own national men's team, women's team and Sevens team.

The Cayman Islands are members of The International Cricket Council, FIFA, the International Olympic Committee and the Pan American Sports Organisation, and also compete in the biannual Island Games.

Music

See main article: Music of the Cayman Islands.

See also

See main article: List of Cayman Islands-related topics.

References

External links

Notes and References

  1. http://www.state.gov/r/pa/ei/bgn/5286.htm Background Note: Cayman Islands
  2. http://www.gov.ky/portal/page?_pageid=1142,1481068&_dad=portal&_schema=PORTAL About Cayman
  3. http://www.hurricanecity.com/city/caymanislands.htm Grand Cayman's history with tropical systems
  4. http://news.bbc.co.uk/1/hi/world/americas/country_profiles/3709816.stm Regions and territories: Cayman Islands
  5. Web site: [https://www.cia.gov/library/publications/the-world-factbook/geos/cj.html CIA - The World Factbook - Cayman Islands]. 2008-06-23.
  6. Web site: [https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html CIA - The World Factbook - Rank Order - GDP - per capita (PPP)]. 2008-06-23.
  7. http://www.cimoney.com.ky/section/currency/default.aspx?id=65 The History of Cayman Islands Currency
  8. "This week's dream: diving and lazing on Little Cayman", (29 November 2008) The Week p. 39, Dennis Publishers, UK
  9. Skip Harper, "Adventuring in Cayman Brac",Head and Toe Publishers, Fort Collins, Colorado, USA, 2001, ISBN 0-9640645-2-0
  10. http://www.nationaltrust.org.ky National Trust For the Cayman islands
  11. United States Government Accountability Office (2008). GAO Report to the Chairman and Ranking Member, Committee on Finance, U.S. Senate, p. 7.
  12. Places in the sun. (2007, 24 February). The Economist, no. 382 (8517 suppl.), 3-5.
  13. Cayman Islands Monetary Authority (11 July 2008), Regulatory Framework: Statistics. Retrieved 25 July 2008 from:
  14. http://www.hedgeweek.com/articles/detail.jsp?content_id=12880 Bringing Cayman's Mutual Funds Law up to speed
  15. CayCompass.com (29 July 2008), 0,000–plus funds registered in CI.
  16. Natasha L. Rogoff (n.d.), Haven or havoc?.
  17. Jeremy Hetherington-Gore (n.d.), The Cayman Islands - Paradise Regained?.
  18. Appleby, Guide to the EU Savings Directive: Its relevance for Cayman Islands Investment Funds.
  19. Cayman Islands Financial Services (n.d.). International Cooperation.
  20. http://www.ucci.edu.ky/about.php University College Cayman Islands: About us
  21. http://www.icci.edu.ky/programs.htm International College of the Cayman islands: Programs of Study
  22. http://www.stmatthews.edu St. Matthew's University
  23. http://www.liv.ac.uk/law/cils/ Cayman Islands law School
  24. http://www.caymannetnews.com/cgi-script/csArticles/articles/000106/010674.htm Row brews over rollover
  25. http://www.caycompass.com/cgi-bin/CFPnews.cgi?ID=1011499 Government takes up permit issue
  26. Web site: Cayman Islands - Cay Compass News Online - Rollover for civil servants. 2008-06-23.
  27. Web site: Cayman Observer. 2008-06-23.
  28. "“Cricket, being the national sport of Cayman is a part of the social fabric.", Cricket Association Receives Donation, Press release, 16 December 2003, Cayman Islands Government Information Services.