Guernsey would welcome moves to improve transparency across the
global financial services industry, according to Guernsey Finance
Chairman Lyndon Trott.
His comments come after 11.5 million files were leaked to
journalists from more than 80 countries from the database of the
Panama-based law firm Mossack Fonseca. Following the leak, labelled
as the 'Panama Papers', there have been reports that UK
Prime Minister David Cameron will come under pressure to crack down
on 'offshore' international finance centres, including the
Crown Dependencies of Guernsey, Jersey and the Isle of Man.
Mr Trott said the recent media coverage illustrated the fact
that plenty of misunderstandings remain surrounding the standards
that places such as Guernsey already work to.
"Guernsey became one of the first jurisdictions to regulate
trust and company service providers and this is something which
still does not happen in many territories around the world today,
including the UK," said Mr Trott.
"In addition, Guernsey has had legislation in place since
2000 that obliges all beneficial owners of Guernsey companies and
other legal persons to be properly identified and recorded by
regulated corporate service providers and is one of only a handful
of jurisdictions that have such measures in place. We do not
disclose this information publicly because we value client
confidentiality, but this information can be accessed in a timely
manner by the appropriate regulatory authorities and law
enforcement agencies when requested.
"We therefore fully support international initiatives on
beneficial ownership as in many ways we are already ahead of the
curve and would welcome other jurisdictions enhancing their own
regimes. A level playing field is good for business and
Mr Trott said a recent study had also highlighted the value
Guernsey's financial services sector provides to the UK and
European economies. The KPMG report, published in May 2015 and
entitled International Capital Flows, found that Guernsey's
fund industry facilitated £25 billion of inward investment to
the UK from global investors and some £105 billion on inward
investment into Europe.
"The report emphasised Guernsey's partnership with the
UK and Europe and pointed out that global investors are comfortable
investing into Guernsey fund structures thanks to the Island's
regulatory track record and commitment to transparency, something
that cannot be underestimated in today's environment,"
said Mr Trott.
"As Guernsey's recent MONEYVAL report also showed, not
only do we have in place a highly effective anti-money laundering
and anti-terror financing regime, Guernsey is also active in its
commitment to the practical implementation of tax transparency and
meeting international standards."
Guernsey's Commerce and Employment Minister, Deputy Kevin
Stewart, said it was wrong to suggest that Guernsey was part of the
problem identified by the 'Panama Papers'.
Deputy Stewart said: "This report and the leaks are
interesting as they establish the importance of the beneficial
ownership debate, ahead of the UK-hosted summit in May, to which
Guernsey representatives will be invited. What is also interesting
is the automatic assumption of some that somehow Guernsey is part
of the problem, which is demonstrably not the case."
Deputy Stewart said further steps were underway to enhance that
framework in line with and ahead of developing international
standards, such as those of the Financial Action Task Force
"We are not standing still and being complacent. Law
enforcement and tax authorities in Guernsey share information with
their counterparts in the UK and other jurisdictions and the
effectiveness of that has been documented by UK authorities as well
as independent organisations such as the OECD and the IMF. People
should remember that there is a difference between privacy and
secrecy. Guernsey is a jurisdiction that can provide privacy and
confidentiality, but the fact that we work with other authorities
and exchange information means we are not a secrecy jurisdiction, a
very important distinction."
Probably the most significant change from previous practice in Guernsey law under the Companies (Guernsey) Law 2008, which came into effect on the 1 July 2008, was the consignment to history of the concept of capital maintenance, which was discarded in favour of a solvency model as the basis of a company’s ability to pay distributions and dividends.
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).