Even for a jurisdiction used to an ever-changing regulatory landscape, the end of 2017 particularly tumultuous time for the Cayman Islands financial services industry.

From Dec. 4-15, the Financial Action Task Force is set to begin evaluating the Cayman’s safeguards against money laundering and terrorist financing in a review that has implications for the territory’s international reputation.

By Dec. 5, the territory should also know whether it will be on a European Union blacklist of allegedly “non-cooperative tax jurisdictions,” which could lead to yet to be specified economic sanctions imposed by year’s end.

If those two major events weren’t enough, government and industry officials will soon have to deal with another policy that could have a much larger impact on the financial sector and wider economy: U.S. tax reform.

The Caribbean Regional Compliance Association held a panel discussion on Nov. 17 featuring several U.S. tax attorneys, who discussed what the U.S. federal government’s coming policy changes could mean for Cayman.

While there are currently separate bills from the U.S. Senate and House of Representatives that have to be integrated into one plan, BakerHostetler partner John Lehrer said that the plan’s general features will likely include a lower corporate tax rate of around 20 percent and a one-time lower repatriation rate for corporations who bring their foreign earned income back into the country.

A proposal that could affect investment fund managers is the “carried interest provision,” which is a portion of an investment fund’s profits that the fund’s manager receives. This income is generally taxed at the lower capital gains rate rather than as income earned.

While calls have been made for investment managers to pay income-tax rates on these profits, both the Senate and the House plans state that managers with interest in a fund can be taxed at capital gains rates if they hold the interest for three years or longer, said Lehrer, who represents clients facing enforcement actions from the Internal Revenue Service.

Most other provisions that could affect Cayman are those designed to attract funds back to the U.S., including the repatriation tax, rumored to be around 10 percent and 12.5 percent.

Another provision that could encourage repatriation is the proposal to create a “territorial tax system,” which would mean that U.S. corporations would not have to pay U.S. taxes on the profits they earn overseas. Currently, overseas profits are subject to a 35-percent tax when they repatriate their earnings to the U.S., so doing away with this would remove the disincentive for companies to keep their earnings abroad, according to proponents of the territorial system.

Successful repatriation efforts by the U.S. could mean less business for Cayman, a jurisdiction where nearly 200 of the U.S. Fortune 500 companies have subsidiaries domiciled. Repatriation could also mean that Cayman will see less investment from tax planning, leaving it with business that’s here for less than legitimate reasons, according to Alma Angotti, a former senior official at the U.S. Securities and Exchange Commission.

“What I’m worried about is that you guys get left with all the bad money,” Angotti said at the CRCA conference.

However, some tax experts don’t think the repatriation tax or the global minimum tax will be sufficient incentives for multinational corporations to move their funds back onshore.

Kimberly Clausing, an economics professor at Reed College, wrote in Fortune on Nov. 20 that the Republicans’ tax plan could actually encourage more money being moved offshore because the territorial tax system will encourage more companies to book their profits abroad. And even with the lower one-time repatriation tax, many firms also will still find it cheaper to raise funds in the U.S. by borrowing at a low interest rate rather than bringing their offshore cash back to the U.S., according to some experts.

Several conference attendees asked about the future of the U.S. Foreign Account Tax Compliance Act, which requires financial institutions to provide the IRS with information about U.S. citizens who have accounts overseas.

In the Republican Party’s platform released at the GOP convention in July 2016, officials stated that a Republican-led government would attempt to repeal FATCA because it “allows unreasonable search and seizures” and “threatens the ability of overseas Americans to lead normal lives.”

However, Lehrer said it’s unlikely that FATCA will be repealed any time soon.

“While there is discussion about it, the issue is you have this information and this perceived benefit coming out of it, so I don’t think we’ll see rollback any time soon,” he said at the conference.

Another question asked was about whether the U.S. will collect the beneficial ownership information for the companies registered there.

“There is now a customer due diligence rule in the U.S. that goes into effect in May that will require U.S. banks and other financial institutions to get and verify UBO information at 25 percent. It’s a big step,” said Angotti, eliciting laughter from the roomful of attendees, many of which are subject to a 10-percent ownership threshold for collecting such information.

Angotti added that the federal government will likely not collect beneficial ownership information for U.S.-registered companies because company formation is administered at the state level.

“It would be a nuclear option for the federal government to say you can’t do that anymore because corporate formation has always been a state activity, and states generate millions of dollars from this,” she said.

Along with potential impacts coming from legislative and regulatory changes, Cayman’s financial sector could be indirectly affected by human resource decisions coming from the Trump Administration, said Lehrer.

Over the last several years, there has been a hiring freeze at the IRS, which has also seen a reduction of some $3 billion from 2010 to 2016, he said.

Moreover, the IRS has also been operating without a full-time commissioner since October, when John Koskinen left the office. The current acting commissioner, David Kautter, is also serving as the assistant secretary for tax policy at the Treasury Department.

Lehrer said that the IRS could be operating without a clear policy mandate until a new full-time commissioner takes control.

“Whoever that person is will be able to set directional policy for the IRS in terms of enforcement and other efforts, so stay tuned,” he said.

A further strain on the IRS could come if tax reform is passed. This is because many of the IRS’s 77,000 employees could be moved from focusing on enforcement and compliance matters to interpreting, learning, and educating taxpayers about the thousands of new rules coming down the pipeline.

For the financial industry, this all could mean less scrutiny from the IRS in the short-term, said Angotti.

“You may see fewer enforcement actions because people don’t have the time to do them, or lower fines as there is more pressure to settle quickly because they don’t have resources,” she said.

However, Klausing noted that the Department of Justice is still hiring more attorneys to pursue anti-money laundering cases. So while the industry may be pressured less by tax collectors, it will still be under strict scrutiny from other regulators.

“It is not a good soundbite for any administration to say, ‘We’re making things for money laundering and terrorists,’” said Angotti. “So I don’t think you’ll see any overt policy that limits examination and enforcement for AML sanctions.”