An election on the horizon…

A public registry will be of dubious value if it is bypassed by criminals and those who misuse companies to launder money or evade taxes, says Geoff Cook

Ed Miliband's recent statements on the crown dependencies and overseas territories' record on tax transparency sadly seems to bear all the hallmarks of electioneering, designed to put pressure on the Cameron administration.

For the jurisdictions to be used as a political football in this way is a shame, as tax transparency (including beneficial ownership) is an important subject and one that Jersey takes seriously.

So far as Jersey is concerned, we have captured beneficial ownership information on a corporate registry since 1999 and this information is available to law enforcement agencies. In addition, the Jersey Financial Services Commission (JFSC) regularly undertakes rigorous on-site examinations of businesses to assess compliance.

Given there is ready access and availability of beneficial ownership information to foreign fiscal and investigative authorities, the industry does not believe there is further benefit in pursuing a public register. Furthermore, Jersey's ability to capture ownership information of companies is far ahead of those available in other onshore and offshore jurisdictions, including the UK, which is thus far alone in calling for a public registry.

At the last meeting of G20 nations, one of the key findings on beneficial ownership was an endorsement of the current Financial Action Task Force (FATF) approach, which is to ensure that the true owners of value are known, that this information is readily available and that it can be exchanged between governments without undue difficulty.

In Jersey, we believe this is the prudent approach; a public registry will be of dubious value if it is bypassed by criminals and those who misuse companies to launder money or evade taxes, meaning any data captured will be unreliable.

Jersey leads on current international standards through operating a central registry and by regulating all corporate service providers, who have a legal obligation to ensure that accurate and up to date information is held on the real owners of companies, trusts and bank accounts. Few other countries do this, including the UK.

In addition, calling for the blacklisting of a jurisdiction that already operates to a higher standard than the UK, and indeed most other countries, will not impress the OECD. They are highly unlikely to act on a request to pursue discriminatory action that is not well founded in international standards and regulation, and would by implication require them to blacklist France, Germany and the USA.

It should be noted that tax evasion is a criminal offence in Jersey and has been since 1999. The island authorities have indicated on many occasions that they neither desire nor engage in schemes designed to help companies or individuals evade UK tax, a position wholeheartedly supported by the industry in Jersey. Furthermore if any legal schemes designed to minimise tax are challenged by HMRC and deemed to be illegal, the Jersey authorities will not house them.

The wider issue of transparency in financial services is an important development and this is something Jersey fully supports, providing it is achieved through practical and workable global standards. A mature approach that balances the need for transparency with a legitimate right to an appropriate level of confidentiality will also be welcome.

Regrettably, the election gun has been fired and we will see a lot more huff, puff and hyperbole before it's all over. Roll on 7 May.

Geoff Cook is the CEO of Jersey Finance

He writes a regular blog about Jersey for Private Client Adviser

This article was amended on 03/03/15