Transparency standards across international finance centres have been the focus of much attention this year.

Since the Panama Papers leak in April 2016, there has been increased scrutiny placed on jurisdictions such as Guernsey because of our position ‘offshore’. Rather than shy away, Guernsey has used the situation to emphasise its stability and adherence to international standards on transparency and information exchange.

Our core strategies as a finance centre are founded on a reputation for quality and compliance, economic stability, effective regulation, global standards of transparency and anti-money laundering (AML), and the ability to demonstrate real substance in our industry.

Of course, much of the fallout from the Panama Papers centred on the beneficial ownership of companies and trusts, and the level to which this information should be made public. The media coverage at the time illustrated the fact that plenty of misunderstanding remains surrounding the varying standards that different ‘offshore’ centres work to. Indeed, Guernsey’s adherence to international standards is more advanced than that of other much larger jurisdictions, as we were one of the first to regulate trust and company service providers – something that still does not happen in many territories around the world, including the UK.

In addition, Guernsey has had legislation in place since 2000 that obliges all beneficial owners of Guernsey companies and other legal persons to be properly identified and recorded by regulated corporate service providers. It is one of only a handful of jurisdictions that have such measures in place. We do not disclose this information publicly, because we value client confidentiality, but it can be accessed in a timely manner by law-enforcement agencies and tax and regulatory authorities, both locally and internationally, when requested. Guernsey therefore fully supports international initiatives on beneficial ownership, as in many ways we are already ahead of the curve and would welcome other jurisdictions matching our standards.

As Guernsey’s recent MONEYVAL report shows, not only do we have a highly effective AML and countering the financing of terrorism (CFT) regime, Guernsey also has measures to facilitate forms of international cooperation. We also play host to financial institutions and authorities that are highly competent, knowledgeable and aware of their obligations. The monitoring body of the Council of Europe found Guernsey is compliant or largely compliant with 48 of the 49 Financial Action Task Force recommendations on AML and CFT – the highest of any jurisdiction so far assessed. This sustains a world-leading position established when we were last assessed by the IMF in 2011. Guernsey’s corporate tax regime has also been given a seal of approval and found to be compliant by the EU Code of Conduct Group on Business Taxation.

Certainty

As was the case with the Panama Papers, Brexit has caused some to question and seek clarity regarding Guernsey’s situation, particularly as many know us as a British Crown Dependency.

The salient point is that, as a Crown Dependency, Guernsey’s links to the UK are through the Crown rather than parliament, which means the island has its own legislature and can determine its own laws. It means Guernsey actually provides an oasis of stability amid uncertainty as we wait for the UK to consider its way forward.

For a start, Guernsey’s constitutional relationship with the UK will be unaffected by Brexit, as it will continue to be self-governing. Our trading relationship with the EU for services (including financial services) will also remain unaffected, as Guernsey will continue to be outside the EU. Our well-established third-country provisions will continue to be utilized to ensure trade in financial services.

We have secured this relationship with the EU due to the fact that, over a number of years, Guernsey has demonstrated equivalence to EU standards – a perfect example being the much-discussed Alternative Investment Fund Managers Directive in the funds sector.

Stability

In the current climate, Guernsey’s well-established third-country relationship with the EU, coupled with its ongoing commitment to international standards on transparency and information exchange, means the island is a safe harbour for financial services. This is particularly the case for private wealth and institutional clients, who are increasingly looking towards well-regulated jurisdictions to meet their needs. The substance evident in Guernsey’s business environment offers them the high degree of stability, reliability and certainty they are seeking, and a jurisdiction that is in tune with the future direction of the global financial services industry.

An original version of this article was first published by STEP Journal, November 2016.