Isle Of Man Treasury Minister Hits Back Over Reports On 'Secrecy Laws'

by Amanda Banks, Tax-News.com, London

09 August 2001

The Isle of Man Online news agency has reported that Treasury Minister, Richard Corkhill, has written to Ireland's Sunday Independent newspaper, among others, condemning their coverage of recent court proceedings in Ireland over allegations that financial institutions in the Isle of Man have helped Irish customers avoid paying tax.

Mr Corkhill was particularly angry at the suggestion that the Isle of Man has 'secrecy laws' governing the Island's financial institutions. He wrote: 'The Isle of Man has some of the strictest regulation against criminal abuse in the world, which has been specifically designed to keep out "hot money". Our economy is the fastest growing in Europe with a growth rate of 13.5 per cent. We do not need ill-gotten gains and we do not want them.'

He continued: 'Recent (newspaper) reports have spoken of the Isle of Man's "secrecy laws". This is simply not true – we have no such laws. Of course our legislation protects customer confidentiality in the same way it does in most other reputable jurisdictions. However, we have always made it clear that we will co-operate fully with investigations into criminal activity.'

Ireland's Finance Minister, Charlie McCreevy, has been asked by Fine Gael's Jim Mitchell to launch an investigation into the scale of tax evasion by Irish account holders in banks in the Isle of Man. Mr Mitchell estimated that branches of Irish banks on the Manx Island held around £4 billion of Irish residents' money. According to the Irish Independent, Mr Mitchell has asked: 'There is twice as much per capita from Ireland than from the UK in the Isle of Man. Should that not ring alarm bells in the Department of Finance?'

Mr McCreevy said such an investigation would take up a significant amount of time and resources, and although many account holders would have legitimate reasons for having accounts outside of Ireland he had every confidence in the Irish Revenue Commissioners' ability to seek out those who evade paying their taxes and he would make sure that they have every sufficient power to do so.

In his letter, Mr Corkill concluded: The "ease" with which one is purported to be able to open an Island bank account involves providing independent proof of your name and address, which in turn has to be separately verified. Potential customers must also provide details of the source of the funds – if this is not verifiable the account is likely not to be opened. Accounts are monitored closely to guard against any criminal activity.'

'The word "offshore" seems to make people get over-excited. But contrary to popular myth, it is not synonymous with "illegal", we live in a global economy, business people travel and trade across the world. To hold a bank account in a jurisdiction accustomed and adapted to such lifestyles is not really that strange.'

Recommended