Guernsey: Guernsey's Chief Minister Voices Support For Greater Global Tax Transparency

Last Updated: 20 May 2013
Article by Fiona Le Poidevin

Most Read Contributor in Guernsey, September 2018

Ahead of the forthcoming G8 and G20 meetings on tax transparency, Guernsey's Chief Minister, Peter Harwood, has taken the opportunity to set out the Island's leadership and track record on tax transparency.

In a statement, the Chief Minister said Guernsey firmly believed that common global standards were the most effective method of fighting fraud and tax evasion, and strongly supported the rapid adoption of FATCA-type multilateral automatic information exchange as a new global standard.

" Guernsey has welcomed the recent announcement by the UK, along with France, Germany, Italy and Spain, to pilot automatic information exchange based on the FATCA agreements with the USA (the 'G5 Pilot') and we support those countries' efforts to ensure that the OECD adopts multilateral automatic information exchange as a new global standard," he said.

"Earlier this year I was able to announce Guernsey's intention to finalise a draft agreement on a proposed 'tax package' with the UK. That package included an agreement in principle to enhanced reporting of tax information along FATCA principles. Our agreements with the UK and the US will be subject to the proper decision-making process of our Parliamentary Assembly and will be presented to them for approval later this year. As I made clear in my open letter to Prime Minister Cameron of 1 May 2013, at that juncture I would be willing to present a report and a recommendation on joining the G5 Pilot."

He added that Guernsey was fully supportive of the UK's G8 agenda and that the Island remained committed to meeting all international standards on beneficial ownership, as demonstrated by its implementation of the FATF recommendations.

"The actions we have taken in Guernsey emphasise that we fully support international co-operation on the transparency of and access to beneficial ownership information.  We support the calls for greater tax transparency - not just with our words but with our actions. We are part of the tax transparency process, and look forward to continuing to play our part. The message from Guernsey is clear - Guernsey is not a jurisdiction of choice for those who want to hide."

The Chief Minister's statement emphasised Guernsey's track record in the area by highlighting 10 examples of the Island's commitment to tax transparency, combating financial crime and asset recovery.

Guernsey's track record:

1. Guernsey was on the original OECD 'white list' and by resolution of its Parliamentary Assembly it has a clear policy objective to continue to meet international standards on tax transparency. In April 2013 the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes published a report confirming that Guernsey has in place all the necessary legal and regulatory powers to ensure it can meet the internationally agreed standard on obtaining and exchanging information for tax purposes. Guernsey has over 40 tax information exchange agreements in place and is building a network of double tax agreements that will lay the foundation for moving towards participation in a multilateral automatic exchange program.

2. Guernsey has been in receipt of the highest compliance rating (category 1) by the UK Government and HM Revenue and Customs in terms of compliance in information exchange since the ratings were introduced in 2011.

3. Guernsey chose to automatically exchange information under measures equivalent to the EU Savings Tax Directive, a practice still not met by some EU Member States.

4. Guernsey meets the standards of 'good global governance' in tax issues as recommended by the European Commission in December 2012.

5. Guernsey voluntarily adopted and complies with the EU's Code of Conduct on Business Tax.

6. Guernsey meets the key FATF recommendations on anti-money laundering (AML); tax crimes have been a predicate offence for AML purposes for more than a decade.

7. Guernsey works with developing countries and multilateral institutions on asset recovery, and remains committed to meeting its international treaty obligations under the UN Convention against Corruption, the OECD Bribery Convention and the European Convention on Mutual Assistance in Criminal Matters. Guernsey voluntarily adopts all UN and EU sanctions and asset freezes to ensure institutions regulated in the Islands cannot be used as a 'back door' for parking or transferring targeted assets. All EU restrictive measures imposed since January 2011 have been implemented and are administered robustly.

8. Guernsey remains committed to assisting international efforts on asset recovery - the recovery and return of stolen and misappropriated monies. Guernsey has participated in the UN Office on Drugs and Crime/World Bank's Stolen Asset Recovery initiative (StAR) since its outset in 2007. Guernsey was among the founder members of the Camden Asset Recovery Inter-Agency Network (CARIN) and is a member of the Egmont Group.

9. Guernsey has regulated trusts and corporate service providers for over a decade. Many OECD members do not yet regulate trusts and corporate service providers.

10. There are no banking secrecy laws in Guernsey.

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.

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