British Government Sets Out Reforms For Its Offshore Islands

Tax-news.com

17 March 1999

The UK Government issued a plan for future relationships with its Overseas Territories, including the British Virgin Islands, the Cayman Islands, Bermuda and the Turks and Caicos Islands (all these territories will be covered in lowtax.net's Jurisdictions section). Although these territories have all passed anti-laundering and other anti-abuse legislation, the Government says there is more to be done. Particular demands include:

• legislation for the effective regulation of the offshore sector to fully meet accepted international standards.
• comprehensive measures extending to all financial institutions to combat money laundering and improved regulation of company formation and those involved in it.
• powers to insure that regulators and law enforcement authorities in the Territories cooperate with their foreign counterparts over investigations and enforcement matters, 'whatever the secrecy laws'.
• licensing and regulation of all financial activity to allow fair competition between the Overseas Territories.
• establishment of independent regulatory bodies that meet accepted international standards.

EU pressure to end 'harmful tax competition' is perhaps the main driving force behind the UK Government's action. The IOFCs themselves worry that if they cooperate too fully, their business may drift away to more independent IOFCs which don't have high-tax nanny countries breathing down their necks. Watch this space.

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