U.S. Signs Tax Information Exchange Agreements with Cayman and Antigua

On November 27, 2001, the U.S. and the Cayman Islands signed a exchange of information agreement (TIEA), significantly boosting the commitment by and efforts of the Bush Administration to strengthen the U.S. tax information exchange capabilities. The TIEA contains and interesting provision: the rights and safeguards secured to persons by the laws or administrative practice of the requested state are not affected, ?provided and to the extent that these are not so burdensome or time-consuming as to act as impediments to access to the information. Robert M. Morgenthau, the Manhattan district attorney, criticized the TIEA because it does not take effect immediately and allows tax evaders to move their money and assets prior to the effective date of the TIEA. Most importantly, even with the safeguards provision, the U.S. has obtained a very broad right to obtain information from and/or conduct tax examinations and investigations for a broad range of purposes.