The Guernsey Financial Services Commission has a new director of investment business, former Bank of England employee Peter Moffatt, who has vowed to draw on the strengths of the island's offshore sector in rejecting the OECD's classification of Guernsey as a harmful tax haven. Whilst he believes that Guernsey will remain under close scrutiny from abroad, he aims to reassure investors that they have nothing to fear by ending the gulf between the regulator and the regulated.
In an interview with the Guernsey Press, Moffatt said: 'We are on the same side.There should be almost nothing that a regulator wants that shouldn’t be good business practice.What we are trying to do is what protects investors the best, and what maintains and enhances the international reputation of Guernsey.' Mr Moffatt has spent 25 years working in the area of regulation but says that the Financial Services Commission does not slavishly follow Bank of England regulatory practice. Instead, he says, it is tuned to the needs of a leading offshore financial centre.
Guernsey, like its Channel Island neighbour Jersey, was targeted by the OECD in June as being a jurisdiction which, according to the Paris-based organisation, posesses harmful tax practices. Both islands have naturally been incensed at their inclusion on the OECD tax haven blacklist, and Mr Mofatt joins the Guernsey Financial Services Commission at a time when Guernsey is being closely watched on an international level and is striving to restore its reputation in the wake of the OECD report.
Mr Moffatt expects that the ongoing spotlight on Guernsey will continue but he commented: 'The last year of international scrutiny proved to be very positive in the main. The Edwards Report, the Financial Action Task Force and the Financial Stability Forum were all positive and I think that is because the people involved took the view of regulators. The OECD listing of Guernsey as a tax haven was unhelpful. That is because that is a different forum which took the view of tax inspectors with their sometimes negative view of human nature, dedicated to tracking-down people who don’t pay tax. Most of the business conducted here is tax neutral and that neutrality allows the business to be marketed internationally. Guernsey’s finance sector is not tax driven although there is an element of that sort of business. Over the years that residual, tax-driven business will go leaving us with the strengths of a well-regulated financial centre, as the outside world has discovered, backed by a well-educated population with an international outlook.'
Mr Moffatt is clearly keen to get on with the task of eliminating any negativity about Guernsey which may have come about through the OECD blacklisting. It is fair to say that those jurisdictions "named and shamed" have, at the very least, had their reputations dented as a result of their inclusion. But Peter Moffatt says quite categorically: 'The OECD is wrong to class Guernsey as a tax haven or uncooperative jurisdiction. If that was true I would never have come here.'
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