Though the Cayman Islands is 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, 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 co-operate with foreign investigators.


Why didn't the United States and other developed countries criticize the Cayman Islands for allowing tax evasion? There was significant criticism against the Cayman Islands for allowing drug trafficking and money laundering, but there doesn't seem to have been significant criticisms against it for allowing companies to avoid paying taxes through offshore companies. Is there a reason why?

  • The U.S. and other developed countries have criticized the Cayman Islands for allowing tax evasion, repeatedly and emphatically. The question is based on a false premise. Lots of international tax law and policy revolves around solving the problem it exemplifies.
    – ohwilleke
    Aug 16, 2021 at 20:45

2 Answers 2


Wikipedia is not always up to date. The article cites a 2016 quote from Obama. The EU added them to Annex 1 in 2019 and removed them from Annex 1 in 2020. (Which doesn't mean they're good, just that they've gotten better.)


Because political groups of western world definitely use this off-shore for their needs - otherwise it would be closed long ago.

For example, you may read it here. Western off-shores, that aren't used by the west don't live long.

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