Guernsey Now Wavering On OECD Commitment

by Justin Gorringe, Tax-News.com, London

22 February 2002

Following strong indications from Jersey this week that it will come to terms with the OECD over its unfair tax competition initiative before the 28th February deadline, fellow Channel Island Guernsey has now said that it too will almost certainly sign a commitment letter agreeing to reform its financial transparency and information exchange arrangements.

Laurie Morgan, Guernsey's de facto prime minister, said yesterday that the island hoped to make an announcement before the 28th, after which the OECD threatens to impose sanctions on the 26 countries and territories still on its 'black-list'. Nine of the original 35 listed jurisdictions have signed 'commitment' letters, although many of them are conditional on compliance by other jurisdictions, which is far from sure to happen.

"We are determined we should not be listed as unco-operative," Mr Morgan said. "We want to be an international player and we want to be signed up to the best international practices. There is nothing of any fundamental difference to be resolved now, it's only little details - literally words and phrases."

Although the British Government has no formal role in the discussions between the OECD and its offshore 'dependent territories', seven of which originally figured on the black-list, it has been putting strong pressure on Jersey and Guernsey to fall into line, wanting to avoid the embarassment of being seen as the willing partner of intransigent tax havens.

With the US having forced the OECD to water down its original demands, and ambivalent about some of the Paris-based organisation's remaining objectives, it is not clear that there will be an international consensus to sanction blacklisted jurisdictions, and many of them probably still calculate that it is better to hang together rather than be hanged separately.

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