Dominic Wheatley, Chief Executive of Guernsey Finance, says that the island strikes the right balance between privacy and secrecy for private clients.
The subtle distinction between privacy and secrecy was brought to the fore this summer in the Houses of Parliament.
Guernsey was concerned by efforts to force Britain's Crown Dependencies to make their registers of beneficial ownership open to public inspection, particularly as the move threatened to overturn a constitutional position dating back nearly 1,000 years that Parliament cannot choose to legislate for the islands on their domestic issues.
Parliament instead agreed that the British Overseas Territories – including Bermuda and the Cayman Islands – must set up public ownership registers by the end of 2020, or have them imposed by the UK.
Guernsey agrees with the Overseas Territories that a public register of beneficial ownership is not a 'silver bullet' for improving transparency. Verified and accurate information on a private register, where access is granted to the relevant authorities only, as with Guernsey's, is a far more robust and effective approach to combating harmful tax practices than having unverified information available to all.
Guernsey is a mature, stable jurisdiction with a strong record and clear position on transparency, and a clear understanding of individuals' privacy. As a British community we share British values, including the rule of law and the obligation to pay taxes due. We are committed to protecting privacy for individuals' legitimate personal interests. We are not a 'secrecy jurisdiction'.
Some argue that public registers should not worry those with 'nothing to hide', but we say that this needs to be balanced against the right to privacy, particularly as times and attitudes change.
Most would accept that there must be rights to reasonable privacy in civilised society. However there is more than a marginal difference between legitimate and reasonable privacy from the prying eyes of the merely curious, and the rights of legitimate public authorities.
It may be entirely appropriate for a 'star', plagued by paparazzi, to use an offshore ownership structure to conceal a residential address, provided they do not seek to keep ownership of that property secret from the appropriate public authorities.
The right to legitimate privacy from public gaze cannot and should not be conflated with secrecy of income and assets from legitimate authorities. This is why Guernsey has enthusiastically adopted and implemented such initiatives as an enthusiastic 'first mover' rather than a reluctant follower.
The reasons for wanting privacy are important in defining the best strategy to deliver it. In the event of private information coming into the public domain, the damage caused – particularly reputational damage – will be as much determined by the motivation for keeping it confidential as by the nature of the information. The avoidance of tax will play badly in the media, whereas the avoidance of paparazzi may get significant public sympathy.
Guernsey's approach to privacy and transparency, which has been validated by global authorities, meets today's standards, with the rights of the individual secured, but no room for criminality.
The distinction between privacy and secrecy is subtle, but also important.
For more information about Guernsey's finance industry please visit www.weareguernsey.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.