New UK report confirms praise from OECD, G20 and IMF
The status of Jersey and Guernsey as financial centres has received a further boost from an independent study commissioned by the UK Government. The Foot Review of British Offshore Financial Centres, published at the end of October, confirmed that both jurisdictions set an example for other offshore financial centres. Its findings follow endorsements earlier this year from the OECD, G20 and IMF.
“This review confirms that we are in the right places for clients seeking safe, stable and reputable places to do business which meet the highest international standards,” says Bedell Group Senior Partner Anthony Dessain. The Group has legal and fiduciary practices in Jersey and Guernsey, as well as London, Dublin and Geneva.
The report showed both centres to be performing extremely well in all areas covered by the review. It praised the resilience of their financial service industries in the face of the economic downturn, the standard of their regulation and supervisory oversight, and their continuing evolution to meet changing global requirements. In particular, it highlighted the significant economic benefit they bring to the UK economy and the City of London, providing a gateway for funds that would not otherwise flow into the UK. This was of significant value to the UK during the banking crisis: at the end of June 2009, the report noted that UK banks had net financing of US$218.3bn from Jersey and US$74.1bn from Guernsey.
Jersey was also singled out as an example of jurisdictions that “have made considerable efforts to tackle financial crime and have a good story to tell”. The report noted Jersey’s positive assessment from the IMF against the international Financial Action Task Force’s ‘key and core’ recommendations to counter money laundering and terrorist financing: it is compliant or largely compliant with 15 of the 16 recommendations. The IMF is expected to assess Guernsey in 2010.
“Jersey and Guernsey are safer and stronger than they’ve ever been,” says Anthony Dessain. “They are leaders in meeting the expectations of the international community, and we are proud to be helping to shape that leadership”. For example, we played a part in developing Jersey’s new Foundation Law – creating a unique new financial structure that has stood up to close international scrutiny this year.
“These are jurisdictions that listen to what people want to do, work to remove impediments, and help them to achieve their objectives more easily and efficiently. As a firm, we share these objectives as we work to meet our clients’ requirements in a timely and proficient way.”
Four powerful endorsements
The Foot Review was commissioned by the UK Chancellor of the Exchequer in December 2008 to consider the three Crown Dependencies (Guernsey, Isle of Man and Jersey) and six Overseas Territories (Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar and Turks and Caicos Islands). The review team was asked to “identify the opportunities and challenges generated by turmoil in the financial markets and the subsequent impact on the world economy”. Its report was published on 29 October 2009.
The review rounds-off a year in which both jurisdictions have been repeatedly commended for their stability and probity:
In March 2009, the OECD confirmed that both Jersey and Guernsey were playing an active and constructive role in developing greater transparency and leading the way in the signing of tax information exchange agreements.
- Following the G20 meeting in London in April 2009, both Jersey and Guernsey were included in the organisation’s “whitelist” of jurisdictions that have substantially implemented the internationally agreed standard for the exchange of tax information.
- In September 2009, the IMF’s Financial System Stability Assessment Update ranked Jersey as one of the top 5 jurisdictions globally, along with the UK and the US.
- In addition, Jersey was the first offshore centre to become a full signatory to the IOSCO Multilateral Treaty.
- Jersey (and Guernsey) are due to receive equivalence under the EU Statutory Audit Directive.