Guernsey: Panama Papers: How Has Guernsey Responded?

Last Updated: 30 January 2017
Article by Marcus Leese

Most Read Contributor in Guernsey, November 2018

The leaking of private documents from Panamanian law firm Mossack Fonseca in April 2016 served to undermine the legitimacy of offshore financial centres. Marcus Leese, Ogier Partner, explains how Guernsey has rebuilt trust in the aftermath.

In early 2016 several million client-related documents were stolen from a Panamanian law firm. The documents were subsequently passed to the International Consortium of Investigative Journalists, who proceeded to publicise the theft and to selectively release small elements of the stolen material (seemingly on the basis of what it judged to be the most salacious and embarrassing of the material).

The popular press reported these events widely – aware of the popularity of any story which conflates money, the powerful and/or famous, and the offshore world. The usual and expected public outrage was generated. This became widely known as the Panama Papers.

With the greater part of a year having now passed, it is perhaps timely to consider how Guernsey has responded.

One could legitimately say that in response to the Panama Papers, Guernsey has done absolutely nothing. Or, more accurately, has done absolutely nothing differently from what it was already doing.

The simple reason for this is that for the past in excess of 20 years Guernsey has been taking active steps to minimise the risk of the types of shortcomings revealed by the Panama Papers happening in Guernsey. And we are continuing to do so.

A few examples

In 2000 Guernsey enacted a comprehensive all crimes anti-money laundering regime. The regime includes all criminal conduct (including tax matters and terrorism) as predicate offences and imposes a positive obligation for disclosure with very severe penalties for breaches.

For just as long, Guernsey has had a comprehensive regime requiring the licensing and on-going regulation of all financial services providers, including in particular those who incorporate, establish and administer companies, trusts, foundations and similar vehicles.

This has ensured not only higher service standards and protection for consumers using such providers, but also provided a mechanism to reinforce the anti-money laundering regime and ensure that comprehensive information on the source of funds and the identities of ultimate beneficial owners of such structures are always obtained and kept up to date.

In the area of tax information exchange, Guernsey has been at the forefront. When tax information exchange agreements (TIEAs) were first proposed, Guernsey embraced the principle and has now signed 60 such agreements.

Although not part of the European Union, when the European Union savings tax directive was implemented, Guernsey introduced equivalent domestic legislation to ensure Guernsey entities could not be used to avoid the directive. Guernsey actively requested to be a party to the international convention on mutual assistance in tax matters and has been subject to it since 2014.

In addition, Guernsey has entered into relevant inter-governmental agreements with the United States and is a fully engaged and compliant participant in the FATCA regime. Guernsey entered into similar arrangements with the United Kingdom for the 'UK FATCA' regime. And Guernsey has been an early adopter of the Common Reporting Standard (CRS) regime. Guernsey also has full double tax agreements in place with a range of countries and also agreements for mutual assistance on tax matters with many other jurisdictions.

The above are all examples of Guernsey's long-established policy of active international engagement. Unlike some other international finance centres, Guernsey has chosen a path of active engagement with international governments and supra-national bodies.

The Guernsey office in Brussels' assistance in discussions with the European Union and its constituent bodies, our continuous dialogue with the United Kingdom government and authorities and our readiness to respond to international initiatives are all part of this. This is not to say Guernsey will supinely acquiesce to any edict irrespective of its own interests (our record on the United Kingdom proposal for a public, central register of beneficial company ownership is testament to this). Simply, we will actively engage where it is the right thing to do.

And all of the above has quite rightly resulted in positive endorsement from international bodies. Positive statements from relevant ministers in the United Kingdom parliament, positive reports from Moneyval and the OECD regarding our regulatory regime, endorsement from the European Union authorities regarding our tax regime are all examples of this.

None of the above is intended to sound complacent. It is never possible to design any system which prevents all abuse by those focused on achieving it. Moreover, the world is developing constantly and the demands upon Guernsey (and all other international financial centres) are changing with it.

But Guernsey has shown over the course of several decades that it is ready and willing to engage in a positive fashion and develop its own regimes to comply in a way which meets those evolving standards but still provides a system which allows international financial transactions to flourish.

An original version of this article was first published in eprivateclient's 2017 Guernsey report, January 2017.

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