Guernsey: Guernsey - A Safe Harbour In Choppy Waters

Last Updated: 13 November 2012
Article by Fiona Le Poidevin

Most Read Contributor in Guernsey, September 2018

Guernsey Finance's new Chief Executive, Fiona Le Poidevin, talks to Jennifer Palmer-Violet about the international finance centre's past successes, present challenges and future opportunities.

In a year that sees major developments in Guernsey's fiduciary sector, Fiona Le Poidevin is relishing her role as head of Guernsey Finance, the promotional agency for the Island's financial industry. 'It's a really good time because we've got so many things to say,' says the new Chief Executive, who succeeded Peter Niven in July. 'We've got the history of being a great trust jurisdiction, but we've also got new things to take forward.'

The proposed foundations law, due to be enforced in the coming months, will open the former trusts-only jurisdiction to the civil-law world, and the introduction of image rights pitches the Island as the pioneer of a modern legislative issue. Guernsey strives to diversify its financial services offering. Along with new products, it is treading fresh ground geographically. Since taking the agency's top job, Le Poidevin has already visited Russia, Hong Kong, Singapore and China, and has taken a 'fascinating' trip to Inner Mongolia. 'It's exciting but it's very demanding because you're constantly on the go,' she says. 'But despite advancements in technology I don't particularly in emerging markets where it's all about developing relationships and personal interaction. I've found it invaluable to go to these countries and speak to people on the ground.'

But while Le Poidevin is focused on breaking emerging markets, she is conscious not to ignore the Island's existing client base. Guernsey still does much work in London and the EU, and is looking at other developed markets, such as the US, too. She says: 'With the fiduciary sector threatened by increasing pressure from the UK and the wider EU in terms of offshore structures, it's just as important that Guernsey continues to protect its reputation and to educate everyone so we maintain our market share there.'

Clearing up matters

This year has shone an unwelcome spotlight on international finance centres (IFCs), particularly Guernsey and Jersey. 'We're here to promote the Island's positive qualities, the great industry that we have here and the good work that we do,' says Le Poidevin, 'but part of our job is increasingly countering these negative perceptions, trying to deal with them and to re-educate.' While politicians have been debating taxpayer morality, the EU Commission has announced a programme aimed at addressing unfair competition deriving from aggressive tax planning.

The media response has further confused the issue, and public perception is driving political will more than ever, says Le Poidevin. 'One major problem is the lack of understanding of IFCs' role in the global economy and how much places like Guernsey contribute to that,' she says. 'People are talking about the terms "avoidance" and "evasion" and there's some muddying of the water there, particularly in terms of what constitutes "aggressive avoidance". I think this is incredibly difficult to define in law, so it will be interesting to see how things develop.' Le Poidevin is confident the industry understands the Island's stance, but reassuring others is a challenge. 'We are here to facilitate wealth structures for people looking to enhance and protect their wealth,' she says. 'It's not about tax avoidance and it's certainly not about evasion. Guernsey has never condoned tax evasion.'

With this negativity a primary concern for Guernsey, Le Poidevin believes working more closely with other IFCs will help prove offshore's positive contribution to the global economy. The Crown Dependencies have started working together on financial and legal matters, something Le Poidevin is positive about.

'However,' she says, 'at the same time, we need to realise on the one hand we would have a bigger voice when talking to the UK and the EU but at the same time we are all competitor jurisdictions. We are separate legally, we have our own laws and our own tax regimes. We need to bear that in mind.'

Competitive edge is crucial, especially in light of the global banking crisis of 2008, and Guernsey is in a stable position compared with some of its rival IFCs, claims Le Poidevin. Although the Island didn't escape unscathed – initially it saw decreases in banking deposits and number of licences – it has remained relatively protected. 'Of course we haven't got any banks that are indigenous to the Island, so we're not directly exposed to systemic risk. In addition, I think that the four pillars of the industry – fiduciary, banking, insurance and investment fund sectors – have provided a breadth to the economy, which we've needed,' she says. 'I think that helps us to remain resilient in difficult times.'

And the Island has been open to a renewed focus on standards since the downturn. 'In terms of increased external regulation, to some extent all international finance centres are in it together, but I think Guernsey will have found this less of a transition than others because we have embraced a certain level of transparency, while ensuring client confidentiality is paramount. We've never had banking secrecy, for example,' she says.

Good grounding

Perhaps Guernsey's core strength is its adaptability. When HMRC dealt an unexpected blow in April, preventing a significant proportion of the Island's pension schemes becoming qualifying recognised overseas pension schemes, the business community's reaction was to refocus and adapt. 'History has shown pensions are one of Guernsey's strengths and, although the position is uncertain, we recognise we need to move on,' says Le Poidevin. And with the Foreign Account Tax Compliance Act looming, the Island's experience of adjustment, such as when the EU Savings Directive came in, will help prepare for the impact.

The growth of Guernsey's financial sector – it makes up 40 per cent of the Island's GDP, compared with around 25 per cent 20 years ago – can be attributed to the Island's adaptability and ability to develop specialist niches, according to Le Poidevin. 'That's really what has contributed to our success as an international finance centre,' she says.

With a mix of opportunities to seize and threats to tackle, Le Poidevin can build on Guernsey's 50-year reputation for trust provision. The 24-sq-mile Island now has a strong network of well-known firms – 'no mean feat in such a small place' – and a highly skilled workforce. 'From the experience we've built up over the last few years, we've got a perfect environment in which to do trust business, and the fiduciaries are supported by a pragmatic set of regulation and professional services firms,' she says. 'Despite the external pressures that we face it's important to ensure that our domestic regulation remains pragmatic and flexible because we have to accommodate the specialist services that we're providing on the Island, and we need to ensure that Guernsey continues to be an attractive place to do business.'

Number crunch

  • 50 years of trust and corporate service
  • 62,431 people living in Guernsey (2010)
  • 2,000 employees in fiduciary industry
  • 150 licensed fiduciaries
  • 40 licensed individuals who can act as
  • directors, co-trustees or trust protectors
  • GBP2 billion GDP of the Island
  • 40 per cent of GDP is finance industry
  • All of the Big Four global accountancy firms

Originally published in The Step Journal, November 2012

For more information about Guernsey's finance industry please visit www.guernseyfinance.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions