The OECD attack on certain jurisdictions deemed to possess "harmful" tax regimes has naturally caused anger and outrage in those jurisdictions, with public officials and business figures decrying the now infamous "naming and shaming" campaign. Jersey has been no exception, but it seems the small British dependency has needlessly been shouting itself hoarse. Many observers are of the opinion that Jersey, along with Guernsey and the Isle of Man, is actually closer to settling with the OECD than some might think, and will be able to get itself removed from the OECD blacklist and avoid the economic sanctions threatened against offshore centres that fail to co-operate.
The outcry over the OECD initiative stems not just from the threatened sanctions but from the fear of damage to reputations. However, it seems that Jersey has suffered little in that respect. Anthony Dessain, a Jersey advocate and notary public, has expressed his indignation at the OECD blacklisting, slamming the action of the OECD as wrong and unhelpful, but added: 'I am not sure it has been terribly harmful either. Business is flowing in as we speak.'
Jersey has certainly been one of the more outspoken jurisdictions in condemning the list of 35 tax havens published by the OECD in June as part of a campaign against tax evasion, on which it appeared alongside its Channel Island neighbour Guernsey and the Isle of Man. The OECD claimed the dependencies fell short of acceptable standards of transparency and exchange of information with overseas tax authorities and all three have until next summer to agree to mend their ways.
Jersey's interest is to protect its burgeoning finance industry which manages assets estimated at between £300bn and £350bn. The finance sector generates more than half of gross domestic product and employs about 12,000 people, nearly one-seventh of the population. Its argument against the OECD is that the organisation has been inconsistent in demanding higher standards from tax havens while ignoring the rest of the world and it has failed to make clear exactly what it thinks is wrong.
Despite the public brouhaha, there is an emerging feeling that the differences with the OECD are far from insurmountable. Richard Pratt, director general of the Jersey Financial Services Commission, is pushing for agreement, marking a distinct departure from the attitude the island displayed in the immediate aftermath of the naming and shaming.
Jersey is already examining many of the problem areas for which the OECD has taken it to task. It is acting to increase the transparency of foreign incorporated companies, many of which are administered from Jersey without the Commission's knowledge. Soon all will have to disclose their presence by submitting details such as their names and registered office addresses. Jersey is also to introduce a law dealing with the exchange of information with other tax authorities.
Frank Walker, Jersey's Finance Minister, has said the island is confident it is close to satisfying the conditions for being removed from the OECD's list: 'We are not that far apart and we are confident we will be able to reach a mutually acceptable agreement.' The OECD itself says that Jersey and the other Crown dependencies show "great potential" to avoid sanctions.
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