UK Government Welcomes Measures to Tackle Finance Crime in the Crown Dependencies

COI Press Release

20 March 2000

Improvements in financial regulation and the policing of financial
services in Guernsey, Jersey and the Isle of Man will help secure
their future as top division offshore financial centres, Home Office
Minister Lord Bassam said today.

All three islands have published details of the steps they are taking
to give effect to the conclusions of the Edwards Report on Financial
Regulation in the Crown Dependencies, which was published in November
1998.

The Edwards Report's recommendations aimed to improve financial
regulation and counter money laundering and financial crime in the
three Crown Dependencies. The great majority of recommendations in
the Edwards Report have been accepted directly by the Islands, or
achieved by alternative means.

Commenting on the Islands implementation reports, Lord Bassam said:

"The Islands are continuing to improve and modernise their financial
regulation by reforming internal domestic legislation and local
practices. It is essential for a healthy economy that the Islands
continue to maintain and develop systems of regulation that
demonstrate the integrity of offshore financial services.

"The programme of reforms set out in the implementation plans clearly
demonstrates the Islands' willingness to take forward the issues
raised by the Edwards Report in a positive and constructive way.

"The Islands, like us, understand the need to keep their laws and
systems under review in the light of developing standards of
regulation. The Edwards Report was an essential part of that process
and I am extremely pleased with the Islands' progress to date and
look forward to seeing it maintained in the future."

Welcoming the reports, Treasury Minister Melanie Johnson said :

"Improving financial regulatory standards and tackling financial
crime are top of the UK agenda in promoting international initiatives
to improve standards in offshore centres.

"The welcome positive response to the Edwards Report will contribute
to that agenda. It will be important in securing recognition for the
Islands by the wider world as centres which comply with high
international standards of financial regulation. This will maintain
and enhance their reputation and continued ability to do business
worldwide.

"The UK Government strongly supports these efforts and wishes to see
them succeed."

The implementation reports highlight progress in a number of areas in
meeting the recommendations of the Edwards Report:

- Increased resources devoted to regulating and policing their
financial systems and measures to increase the independence of the
regulators.

- Enactment of all crimes money laundering legislation.

- A commitment by the Guernsey authorities to abolish the so-called
"Sark Lark", and require that in future company directors undergo a
fit and properness test.

- Measures to regulate company and trust service providers.

All three Crown Dependencies have committed themselves to comply with
international standards of regulation of their financial services
industries; keep their regulatory frameworks under review; and to
respond to any changes in international standards.

NOTES FOR EDITORS

1. The review carried out by Andrew Edwards was announced by Home
Secretary Jack Straw on 20 January 1998. Its terms of reference were:

To review with the Island authorities their laws, systems and
practices for:

- regulating banking, insurance and financial services business and
collaborating with overseas regulators;

- deterring, investigating and punishing financial crime, including
money laundering and fiscal offences, particularly cases with an
international dimension;

- registering companies.

2. The publication of the Islands' reports was announced by Home
Secretary Jack Straw in a Parliamentary answer today. Copies of the
parliamentary answer and the reports are available from the Home
Office Press Office .

3. The Edwards Report was published on 19 November 1998.

4. The "Sark Lark" is where residents of Sark become nominee
directors of companies formed overseas. As Sark has no tax or company
regulation, the companies achieve tax-free status and secrecy of
ownership.

5. Press enquiries on constitutional issues affecting the Crown
Dependencies should be directed to the Home Office press office .

6. Press enquiries on financial regulation and money laundering
issues should be directed to the Treasury press office.

.

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