Cayman Islands signs tax agreement

The Cayman Islands has signed an agreement with the United States to share information on bank accounts held in the islands, in what is seen as an important step in the fight against international financial crime.

The information exchange agreement will enable tax officers to break the bank secrecy laws in the Cayman Islands, a British colony long considered a haven for tax evaders and money launderers.

The governor of the islands, Peter Smith, said the colony wanted to be viewed throughout the world as a financial centre that adheres to international standards.

The United States estimates it loses $70bn a year in tax relating to deposits in offshore accounts.

A US attorney, Robert Morgenthau, told the Senate earlier this year that the 600 banks licensed in the Cayman Islands had in their accounts twice as much money as all the New York City banks combined.

From the newsroom of the BBC World Service