Guernsey Blames French For Near-Inclusion on OECD Tax Haven Hit List

Lisa Ugur, Tax-news.com, London

23 June 2000

So the Financial Action Task Force on money laundering (FATF) has finally named what it deems to be "non co-operative" offshore jurisdictions in its much-anticipated but hardly eagerly-awaited list. European financial centres like Monaco, Gibraltar, Jersey and Guernsey do not appear.

Speaking at this week's Society of Trust Practitioners' annual conference, Peter Crook, director-general of the Guernsey Financial Services Commission, confirmed that he had feared Guernsey would be on the tax haven hit list and made no bones about where he felt the finger of blame should point for many of the island's problems in escaping tax and regulation threats.

He said 'If you see a smile on my face today it is because I expect that we will not be on the FATF list. At the start of their enquiries there were 67 on the list. This was whittled down to 31 and, unfortunately, we were still there. This was because of the influence of the French, who, frankly, have proved to be pains in the neck at every stage of these and other proceedings.
Just when we thought we had made some progress, the French would disappear for a while and when they came back the progress we thought we had made was gone.’

Mr Crook has similar sentiments towards the OECD and remarked that negotiations with the organisation had been the most frustrating 18 months of his life. He has never been totally convinced that the OECD was really clear in its perception of 'exactly what harmful tax practices meant'.

Turning to the subject of the abandoned European withholding tax proposals, with the ensuing compromise deal on a greater exchange of information, Mr Crook said that any decisions about Guernsey becoming involved in such an exchange would be up to Guernsey itself, as the island is responsible for its own tax laws. Nonetheless, he added 'if our competitors accept this proposal then I believe there is no way we could resist. Our law already gives us the power to exchange information when it is appropriate'. However, it is plain that Mr Crook is extremely wary of the proposal and he even went so far as to commend the Swiss for refusing to agree to an exchange of information, saying 'I was delighted to hear the Swiss response. I don’t think anybody has thought through the mechanics of this proposal. Guernsey’s government has not signed up to anything acknowledging that it has harmful tax practices and has not agreed to exchange of information. Our government cannot make any decisions when it does not know what they mean to us. I think the status quo will continue for some time and in a year or so we may have to be living with some marginal change.’

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