Jersey: Developments in Offshore Regulation
| Date | 01 March 2000 |
| Pages | 90-92 |
| DOI | https://doi.org/10.1108/eb025970 |
| Published date | 01 March 2000 |
| Author | Richard Pratt |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 8 No. 1 — International
Jersey: Developments in Offshore Regulation
Richard Pratt
There are three main points to be made from
a
Jersey
perspective concerning developments in offshore
regulation.
(1) The distinction between onshore and offshore
centres is now out of date. The true distinction
should be between those centres which are exces-
sively secretive and poorly regulated on the one
hand, and those which are cooperative with
international regulatory agencies and are them-
selves well regulated on the other. Jersey and
the other Crown Dependencies are clearly in
the well-regulated and cooperative camp.
(2) While regulators and Crown Dependencies can
be expected to make such claims, there is no
need to take their word for it. Independent asses-
sors come to the same view. Other regulators
should put the Crown Dependencies to the test.
(3) Regulators in smaller centres — such as the
Crown Dependencies — are perfectly capable
of participating in the debate to improve
regulatory standards. This is happening in Jersey.
ONSHORE/OFFSHORE
London has always been regarded as offshore to New
York. Recent events have demonstrated that New
York should now be regarded as offshore to Russia.
Jersey is offshore to the Isle of Man, the Caymans
and Guernsey. Switzerland and Luxembourg act as
offshore centres for clients around the world. Clearly,
if centres of such a disparate nature as New York,
London, Jersey, Switzerland and the Isle of Man
can all be regarded in some senses as offshore, then
the term has ceased to have any real meaning.
Traditionally, some people have regarded offshore
centres as places where no real business is done. But
this is manifestly not true of many of the centres
which have been called offshore in the past. In
Jersey for example, there is real business being
done. The island docs not simply consist of beaches
and brass plates. Over 75 banks have a real presence
in Jersey and over £100bn in deposits are there. Col-
lective investment funds to the tunc of ,£50bn plus
are managed from Jersey. Insurance companies have
their headquarters in Jersey. Some 12,000 people are
employed in the finance sector. Jersey business is
Jersey based.
Another traditional perception of offshore centres
is that they provide a means of hiding money from
legitimate enquiries by law enforcement agencies or
regulators. This is certainly not true of Jersey or the
other Crown Dependencies. For example the
Crown Dependencies have no bank secrecy laws —
the duties of financial institutions to their customers
are based on exactly the same National Provincial
Bank v Tournier case that governs the same principles
in the UK. The authorities have all the powers they
need and the determination to get and share infor-
mation with other law enforcement agencies and
regulators worldwide. There is no fiscal exemption
from cooperation. There is no fiscal excuse from
the anti-money-laundering laws — a position that
puts the Crown Dependencies considerably in
advance of many European Union or indeed Finan-
cial Action Task Force countries. The Crown
Dependencies would not assert that they had a right
to help people evade their obligations — whether
taxes or otherwise — in other countries, simply
because they are in a position to make money
doing so. On the contrary, Jersey and the other
Crown Dependencies understand and share the con-
cerns of the international regulatory community
about the need to fight fraud and money-laundering
stock. They stand shoulder to shoulder with others in
the fight against crime.
Jersey and the other Crown Dependencies would
therefore seek to test themselves against the best
international standards. They want to play in the
same league and be tested against the best regulators
in the world. From that standpoint, they can claim
that the traditional distinction between onshore and
offshore no longer makes any sense. Instead Jersey
wishes to be regarded as a well-regulated and coop-
erative centre. Where it fails to meet those standards,
the position will be rectified.
THE VIEWS OF THIRD PARTIES
The Crown Dependencies have recently been the
subject of a review commissioned by the UK
government on financial regulation in these Crown
Journal of Financial Crime
Vol
8,
No
1,
2000,
pp 90-92
Henry Stewart Publications
ISSN
0969-6458
Page 90
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