<P> 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 advantage in the global marketplace . The OECD threatened to place the Cayman Islands and other financial centres on a "black list" and impose sanctions against them . 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 . </P> <P> 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 . </P> <P> 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 formalizing 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 (anti-money laundering) obligations". </P> <P> On 4 May 2009, the United States President, Barack Obama, declared his intentions to curb the use of financial centres by multinational corporations . In his speech, he singled out the Cayman Islands as a tax shelter . The next day, the Cayman Island Financial Services Association submitted an open letter to the president detailing the Cayman Islands' role in international finance and its value to the US financial system . </P>

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