Guernsey Responds To UK Offshore Finance Centre Probe

by Jason Gorringe, Tax-News.com, London

26 June 2008

The Guernsey authorities have this week defended the island’s finance industry to the UK Government.

The Policy Council has made a written response to the House of Commons Treasury Select Committee, which announced an inquiry into Offshore Financial Centres in April.

The document highlights the reasons, in the view of the Island's authorities, for Guernsey’s reputation as a leading provider of international financial services.

These include:

• An effective regulatory regime that meets or exceeds international standards on financial regulation, anti-money laundering and controlling the financing of terrorism;
• International co-operation on regulation and the investigation of financial crime;
• Competitive taxation and certainty in its taxation system; and
• Regular, external and independent reviews – in the majority of cases at Guernsey’s express invitation and in all cases with Guernsey’s full co-operation and assistance.

The States authorities have also reiterated their belief that the classification of financial centres as ‘offshore’ and ‘onshore’ is inappropriate.

"This does not fairly distinguish between those jurisdictions which are well regulated and transparent and those which are not," explained Chief Minister Deputy Lyndon Trott, adding that:

"Each jurisdiction should be considered on its own merits on the basis of objective criteria. By a number of objective measures, reports and assessments, Guernsey is a well-regulated, transparent and co-operative jurisdiction committed to maintaining international financial stability and preventing financial crime."

The Treasury Select Committee announced its inquiry, as part of its ongoing workstream of Financial Stability and Transparency, on 30th April this year.

It particularly asked for written evidence on issues including the role of offshore financial centres in worldwide financial markets; whether their use threatens financial stability; transparency; and the impact on UK tax revenue.

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