Guernsey: Concerns about reputational damage from Jersey leaks; minister calls on financial industry to challenge “statements by NGOs”

After a summer (and World Cup) related break, Secrecy Monitor is back with regular coverage of offshore media and will be catching up with tax haven news over the coming days.  

– Following a new series of stories about offshore tax havens by the International Consortium of Investigative Journalists, this time focused on Jersey, the Guernsey press website worries that the leaks damage the island’s “‘discreet’ reputation”.

According to the article, Guernsey has been “pulled into” the coverage following revelations about the offshore structures used by restaurant chain Nando’s.

Guernsey Finance and the Guernsey International Business Association are quoted saying that “there was no question of illegal activity taking place in the islands or by the clients exposed.”

– In related news, the Guernsey Financial Services Commission has sent a letter to financial services companies warning them to “keep on top of money laundering risks”.

The warning comes ahead of an “inspection” by Moneyval, the European branch of the Financial Action Task Force – FATF.

“The commission has also specifically warned fiduciary licensees about their responsibilities after some poor practice was observed during some site visits.

It has particularly highlighted a lack of regular reviews or insufficient resources given to compliance and client risk assessments.”

– If there is one statistic which shows the importance of the Channel Islands as an offshore haven, this is it: Guernsey (population 65 thousand) is ranked eighth worldwide in number of FATCA registrations.

FATCA – the US Foreign Account Tax Compliance Act – requires financial institutions with US clients to register with the Internal Revenue Service (IRS).

Guernsey press tries to put a positive spin on the numbers, quoting a Deloitte tax partner saying ‘these statistics show that Guernsey is taking Fatca very seriously’.

-The announcement of a new daily flight connection between Guernsey and City airport in London is yet another example of the deep links between the Channel Islands’ and City financial sectors:

‘The service, which should leave the island at about 8am and return in the evening, offering a full working day in the City of London, will be primarily aimed at the business community and would attract a premium fare’ says the chairman of the airline, Aurigny in the article.

– Finally, Guernsey’s minister of Treasury and Resources has urged the financial sector to join the battle against “media perceptions” of the industry:

“Speaking at a tax event organised by Deloitte, Gavin St Pier said the States’ commitment to transparency and information exchange on tax was well-established, and industry could do as much as government in attempting to change attitudes and inform critics.”

He continued:

‘We just have to continue to bang out the same message at every opportunity to every audience. We can and do engage and it is important not to stick our heads in the sand on this, and to get out and tell the world that we engage with governments and that we do challenge statements made by NGOs.’

Bill Dodwell, head of UK tax policy at Deloitte, also spoke at the event and said:

‘Trying to introduce morality into tax is really quite a challenging concept. Laws are linked to the morality of society but you cannot levy tax based on morality, you need to do it based on law.’

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