GEORGE TOWN, Cayman Islands (AP) -- Cayman Islands officials said they had an encouraging first round of talks at an international forum about eliminating what regulators call "harmful tax practices''.

The British Caribbean territory this year promised the Paris-based Organization of Economic and Development that it would sign an agreement to modify its tax laws. By doing so, the Cayman Islands avoided showing up on a June OECD of 35 countries considered tax havens.

The Caymanian delegation recently returned from the first meeting of the Global Forum on Taxation at OECD headquarters in Paris earlier this month, the government said in a statement on Wednesday.

"The discussions were open, spirited and amicable, and Cayman has much to gain by remaining engaged in this process,'' Finance Minister George McCarthy said in the statement. "We were encouraged by the obvious effort of the OECD to create a balance forum for the discussion...'' The forum participants identified some of the issues likely to arise in creating the tax information exchange agreements. There is to be another forum meeting in March before it produces any drafts of the agreements.

The OECD identified more than a dozen Caribbean countries as harmful tax jurisdictions. Most did not agree to cooperate in advance and ended up on the tax havens list.

The organisation represents the world's most industrialised nations, and eight member countries participated in the forum. Bermuda, Cyprus, Malta, Mauritius and San Marino, who made advance tax commitments to the OECD, also attended.

BUSINESS BUC TAXES TAX