Wednesday, September 28, 2016


Reliable sources in the financial services community have revealed that the surviving Cayman Islands facilities of BNP Paribas* will shortly be permanently closing, as BNP has decided to leave Cayman. In recent years, we have seen BNP reduce its scope in Grand Cayman, by quietly closing up all its other local banking facilities. The last one in operation is slated to be shuttered shortly, though no specific date has been released.

After the Panama Papers disclosures broke in Paris, the French financial industry has come under close scrutiny, regarding offshore operations and the fact that there have been a number of financial scandals in Grand Cayman in recent years, most likely contributed to a final decision to leave Cayman completely. Another factor believed to have been considered is the decision, by many major US banks, to implement de-risking policies, which for the Caribbean means to greatly reduce correspondent relationships with local banks deemed to be high risk, due to money laundering and terrorist financing concerns.

Whatever the principal reason for the BNP departure from Cayman, it may result in a reevaluation of risk, on the part of other foreign banks, with subsidiaries or branches there, especially as the negative global attitude, towards tax haven jurisdictions, hardens, and offshore financial centers find that their client base is diminishing, due to increasing enforcement of tax evasion in the home countries of clients.
* BNP Paribas Bank and Trust, Cayman Limited, BNP Paribas Fund Administration Services (Cayman).

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