The 65 page report, authored by Matthias Levin, examined the prospects of eight European offshore centres - Andorra, Gibraltar, Guernsey, the Isle of Man, Jersey, Liechtenstein, Madeira and Monaco, as well as onshore low tax jurisdictions such as Ireland.

Speaking with regard to the recent international campaigns to eradicate 'harmful tax practices', money laundering, and terrorist financing, Mr Levin observed that:

'By and large, the action to curb some of the characteristics of OFCs [offshore financial centres] has been more successful than expected at the outset. The success of action has, however, varied from issue to issue and depends on the validity of the underlying argument.'

'On money laundering and financial stability, the recommendations have been more or less swiftly implemented by the OFCs, as the norms and principles underpinning these areas were relatively widely shared. On tax matters, things have progressed much more slowly, as the underlying economic case is weaker.'

The report concluded that the future for Europe's offshore financial centres may be somewhat bleak, given that the jurisdictions in question face pressure from both the European Union and the wider international community.

'In the medium to long term, OFCs should try to expand into other fields of business that depend less on low taxes and lenient regulation, but it should be recognised that this is a process that takes time and requires assistance. By virtue of their small size and flexibility, OFCs are nevertheless well placed to reap the opportunities that such a changeover implies,' Mr Levin advised.