Stable, transparent and well-regulated: maintaining Jersey’s international reputation

A key policy objective of the Government of Jersey is to ensure that the Island’s interests are represented at an international level. By developing our relationships with UK, European and international bodies we reinforce the message that Jersey is a cooperative partner, a good neighbour and, as an international finance centre, a well-regulated jurisdiction complying with all relevant international initiatives and standards on transparency and information exchange.

This objective is achieved through a close working partnership between the Chief Minister’s Department, the Ministry of External Relations and its off-Island offices: the Jersey London Office, the Channel Islands Brussels Office (CIBO) and the Bureau des Îles Anglo-Normandes (BIAN), and other departments of the Government of Jersey.

Having a physical presence in London, Brussels and Caen, with officers able to assess the impact of policy and legislative changes and to respond on behalf of the Island quickly and in person, has a manifestly positive effect, as our work particularly over recent months demonstrates.

An example of this is the passage of the United Kingdom’s new Criminal Finances Bill. As a Crown Dependency, the Island, alongside Guernsey and the Isle of Man, was the subject of a number of suggested amendments that neither took account of our constitutional relationship nor our leading position on matters of tax transparency and cooperation.

Whilst the Bill was still in draft and throughout its passage, officials from the Financial Services Unit in the Chief Minister’s Department and the Jersey London Office have entered into proactive discussions with parliamentarians, within both the Commons and Lords, providing them with a clear and current understanding of the Island’s constitutional position and approach to combatting financial crime. Equally, our officials had regular discussions with the key UK Government departments with responsibility for drafting the various provisions of the Bill.

As a result of this, the position of Jersey and our fellow Crown Dependencies has been accurately represented by both the UK Government and by a range of Parliamentarians in the Commons and the Lords. In the Commons, for example, Bob Neill MP (Chairman of the Justice Select Committee), commented that the Crown Dependencies “are up to the highest standards of reporting and ensuring information is readily available to the authorities”. He also quoted the report by MONEYVAL into Jersey’s approach to money laundering which said that:

“Jersey’s combination of a central register of the UBO [Ultimate Beneficial Owner] with a high level of vetting/evaluation not found elsewhere and regulation of TCSPs [Trust and Company Service Providers] of a standard found in few other jurisdictions has been widely recognised by international organisations and individual jurisdictions as placing Jersey in a leading position in meeting standards of beneficial ownership transparency.”

In the House of Lords, Lord Beith said that:

“…the priority is to achieve effective action by law enforcement and the tax authorities, and what they most need is accurate and up-to-date registers which can be accessed quickly in real time. By June there will be no Crown dependency which does not have exactly that: a central register which can be accessed in all cases within 24 hours, or significantly less in urgent circumstances such as a terrorist case. That is the main thrust of this legislation and we should not ignore the fact that that has been achieved.”

The Government of Jersey is in regular contact with UK Government and opposition representatives to ensure they understand that Jersey takes a robust approach to tackling tax evasion and other forms of financial crime and that we have a strong track record of cooperation with the UK and internationally, to bring offenders to justice. Such interaction will continue whatever the outcome of the UK General Election to be held on 8 June 2017.

In respect of our present interaction within the EU in this regard, Jersey has been invited to a hearing of the European Parliament’s PANA Committee. That Committee was established to investigate alleged contraventions and maladministration in the application of EU Law in relation to money laundering, tax avoidance and tax evasion – predominantly in relation to issues arising out of the publication of the ‘Panama Papers’.

Officials with extensive experience of the matters the Committee is expected to raise will represent the Island at the hearing. Our attendance is in keeping with our general policy of engagement, and is consistent with the approach we have taken, for example, in attending a hearing in March 2016 of the European Parliament’s TAXE 2 Committee. In formalising the arrangements we have been greatly assisted by CIBO.

As we found to be the case with the TAXE 2 Committee, this will be a good opportunity to set out to an influential body the strong track record that Jersey has on tackling financial crime and dealing with international tax matters, where we are internationally recognised to be a leader in compliance with the international standards.

I know there have also been concerns raised in the local media that Jersey will be included in the list of non-cooperative jurisdictions that the EU is to produce by the end of this year, which would result in a negative impact on the Island’s global reputation as a reputable international finance centre.

In February, the Government of Jersey received a letter from the Chair of the EU Code of Conduct Group on Business Taxation informing us that the Island, together with 91 other jurisdictions would be subject to a screening process.

The Code Group will be undertaking initial analysis of information in the public domain, including reports of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and the OECD Inclusive Framework for Tackling Base Erosion and Profit Shifting.

Analysis of these reports will show that Jersey is already rated as ‘largely compliant’ by the Global Forum in respect of its international standards, a rating that matches that of Germany, the UK and the USA. Moreover, Jersey’s tax regime has already been assessed by the EU Code Group (in 2011) and was found to be ‘Code compliant’, a recommendation that was approved by the Council of Ministers of the European Union in December 2011.

With the assistance of CIBO, the Government of Jersey will continue to engage proactively and openly with the Code Group and I can see no good reason that Jersey should not again be found to be ‘code compliant’ and meet all the criteria required to ensure that Jersey is not included in any list of non-cooperative jurisdictions.

In addition to the engagement set out above, either I or the Chief Minister visit Brussels about twice a year, usually with Guernsey counterparts, meeting with a wide range of European interlocutors, depending on the topical matters of the day. Officials in CIBO meet regularly with a broad range of contacts inside and outside the EU Institutions, and this is supplemented by regular targeted visits to Brussels by officials from the Islands. Such engagement at both political and official level is essential to support the Channel Islands wider policy objectives, to maintain Jersey’s position as a supportive partner, and to emphasise the Island’s value to the European Union, which Capital Economics in its recent report analysed as supporting 88,000 jobs in the EU.

I believe, as we enter the period of formal Brexit negotiations, that it is more important than ever that Jersey is represented in London, Brussels and Caen. Through our work in these offices along with the work carried out in Jersey, we can continue to develop crucial relationships, be internationally recognised as a cooperative jurisdiction on transparency and information exchange, and thereby ensure a positive and successful future for the Island post-Brexit.

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