Guernsey: Focus On Guernsey

Last Updated: 24 August 2000

Guernsey has emerged in fine fettle from the recent flurry of reports on offshore financial centres ("OFCs"), with praise bestowed upon it by the Financial Action Task Force (the "FATF") and the Financial Stability Forum ("FSF"), particularly with regard to its contribution to the drive against money-laundering.

What Are These Organisations And What Do They Say?

The FATF is an inter-governmental body set up in 1989 by the major financial centres of Europe, North America and Asia with the sole purpose of combating money laundering.

The Financial Stability Forum ("FSF") was also established by the G7 countries and, in April 1999, set up a working group to consider the implications of OFCs for global financial stability. FSF's report made it clear that it did not regard OFCs as inimical to global financial stability provided that they are well-regulated and supervisory authorities co-operated with each other. The FSF placed Guernsey in the top division of OFCs.

The Organisation for Economic Co-Operation and Development (the "OECD") was set up in 1960 to promote sustainable growth in living standards, world trade and economic growth. Its recent report into "harmful tax practices" concentrates upon different issues from those of the FSF and FATF.

The OECD report does not suggest that the conclusions of FATF and FSF are in any way wrong. Indeed, it would have been odd had it done so given that all three organisation are, more or less, constituted of the same states.

The OECD report questions whether the comparative advantage which OFCs such as Guernsey have enjoyed should continue. It assumes that OFCs are, of themselves, harmful to the world economy, notwithstanding that the FSF (also constituted by the G7 countries) concluded that they posed no such threat unless supervisory structures were defective. No report has suggested that Guernsey's structures are in any way defective. The inconsistencies between the conclusions of bodies constituted of virtually the same members are striking.

What is odd about the OECD report is the way in which it fails to particularise precisely what is expected from OFCs by way of co-operation. Guernsey receives fulsome praise from FATF and FSF for its regulatory and other structures whereas other jurisdictions (such as the Cayman Islands) are criticised for failing to have legal requirements for customer identification, record-keeping or ensuring any supervisory authority has access to customer identity information.

However, because the Cayman Islands were prepared to give an "advance commitment", the OECD appears to have overlooked the failings identified in the FATF and FSF Reports. The commitment letter from the Cayman Islands refers to an attachment in which details of the steps and a timetable to eliminate harmful tax practices have been agreed. Oddly in the context of a report urging more transparency, the attachment has not been made public. The commitment letters of other jurisdictions imply the existence of such an agreement but do not refer to it.

The Cayman Islands Press Release dated 19 June 2000 suggests that the OECD was more concerned with issues of transparency and exchange of information than pure "tax practices". Indeed, Minister Truman Bodden, the leader of the Cayman Islands delegation is quoted:-

"It is clearly understood and accepted by the OECD that our commitment letter relating to "harmful tax practices" does not affect the right of the Cayman Islands to maintain its tax neutral regime and its indirect form of taxation."

In light of this press release, it is difficult to see what the OECD has elicited from the Cayman Islands beyond that which it has already elicited from other jurisdictions, including Guernsey, and for which Guernsey has been much praised by the FSF and the FATF.

The All Crimes Legislation

The FSF and FATF Reports were particularly fulsome in their praise of Guernsey's Criminal Justice (Proceeds of Crime) Law 1999 (the "1999 Law") which confers investigatory, confiscatory and enforcement powers and creates specific new offences in connection with money laundering.

Regulations introduced at the same time require financial service businesses to maintain procedures for the identification and verification of new business, keeping records, establish internal reporting procedures, training and other procedures of internal control and communication designed to avoid their being the subject of any money laundering.

The 1999 Law applies where there is complicity in the "proceeds of criminal conduct". It is a matter yet to be decided by the Courts, but it is likely that, if the conduct would amount to criminal conduct in Guernsey, it will be regarded as criminal conduct under the 1999 Law. As a result, Guernsey is perhaps alone amongst the offshore jurisdictions in having regulators prepared to assist other countries in pursuing what might be tax evasion in their own jurisdiction. In that context, the OECD's suggestion that Guernsey is an unco-operative tax haven unwilling to share information with other jurisdictions appears somewhat hollow.


In an age of political spin, it is perhaps understandable that the OECD needed to ensure that some jurisdictions subscribed to commitment letters in order to validate their work. However, it would appear that the Cayman Islands have agreed to do no more than what Guernsey has already done - be more transparent and better regulated. Only when the OECD is itself more transparent can it really expect Guernsey and others to decide how they should respond. In the meantime, Guernsey remains the pre-eminent offshore jurisdiction that it always has been, offering high standards of professional expertise, regulation, supervision and excellent prospects for the future.

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

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

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.