Manx Treasury Chief Says "We Will Not Be Bullied"

Robert Lee, Tax-news.com, London

31 October 2000

Chief financial officer of the Isle of Man Treasury, John Cashen, has lashed out at "sanctimonious" jurisdictions and said the island will not be bullied by international bodies over its practices as an offshore financial centre. Speaking at the annual general meeting of the Chartered Institute of Management Accountants in the Isle of Man, John Cashen said the island had been under almost constant pressure since the 1988 Edwards Report on the Crown Dependencies, but would not bow to it.

Mr Cashen levelled charges of hypocrisy against other unnamed jurisdictions and said prejudice and preconceptions often meant the Isle of Man was accused of being lax about money laundering. He added that the media had contributed to the confusion, with misleading reports over the various bodies and investigations.

Besides the Edwards report, Mr Cashen cited the Financial Action Task Force (FATF) and OECD initiatives on money laundering and harmful tax competition. The latter, he said, had seen the Isle of Man on a list of what he termed "the usual suspects" which were thought to be "unco-operative" jurisdictions. Hot on the heels of the OECD blacklist came Dawn Primorolo’s code of conduct committee for EU member states and dependencies which Brussels tried to apply to the Island despite its non-member status.

Mr Cashen said many of those carrying out the investigations had little idea of how strong the Isle of Man's regulatory legislation and practice was. He also said that many investigators were taken aback by how much co-operation the government had shown. Mr Cashen is confident that the Isle of Man will be removed from the OECD list of harmful tax havens, and talks with the Paris-based organisation are going well. He said that several provisions of the Manx government's five-year tax strategy endorsed by its parliament, Tynwald, earlier this month, would help in the fight to get the island off the OECD's final list to be drawn up next summer.

Mr Cashen said: 'We are big enough to acknowledge these external pressures will dominate our external affairs for some time to come. We could take the moral high ground and refuse to take part in many of the reviews and exercises but we do not. We can react to them and we can cope with them. Only by being involved in them can we influence them. We have never been busier and while our growth continues we cannot afford to be complacent. But we will not be bullied by other jurisdictions who, despite their sanctimonious statements, actually have weaker regulatory legislation.'

Whilst Mr Cashen condemned the pressure put upon the Isle of Man, he said that the upside was that the island had been proven to be amongst the best in fighting money laundering. He described the island's stance as "co-operative but keenly competitive" and said the Treasury would continue to improve regulatory procedures.

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