The Isle of Man Government presented its initial views on the findings contained in the report to 400 representatives of the Island's financial sector that afternoon.
Initial Government reaction
In a key note speech at the presentation, Donald Gelling, Chief Minister of the Isle of Man Government, commented: "Mr Edwards' report, commissioned by the Home Secretary, has provided strong and independent confirmation that the Isle of Man is, indeed, 'in the top drawer of offshore finance centres".
Mr Gelling reminded the audience of the initial remit given to Mr Edwards surrounding matters to be contained within this report, surrounding practices for;
- the regulation of banking insurance and financial services business and collaborating with overseas regulators;
- deterring investigating and punishing financial crime including money laundering and fiscal offences, particularly cases with an international dimension;
- the registration of companies.
The Isle of Man scored highly in many areas of the review but, inevitably, there are matters where the introduction of further legislation will be required. The Chief Minister announced the formation of a committee to consider the recommendations contained in the Edwards report in depth, with a view to reporting to the Island's parliament, Tynwald, in January of next year so that Government's response to the report can be formulated. Meetings with the UK Government will follow at which action plans will be discussed.
Government has identified the following main areas for attention:
- Whether or not the composition of Regulatory Boards should exclude Government representation.
- Whether there should be one single regulatory body to embrace insurance and pensions, banking and financial services.
- Additional compliance requirements for companies.
- Regulation of corporate and trust services providers.
- The amalgamation of the money laundering policing authorities into one unit.
- Enhancement of resource in some areas of regulation.
One of the main areas of the report that contained strong recommendations for change concerned company registration and compliance and regulation of corporate service providers. Here the Isle of Man is already making progress in the consultation process with a view to bringing forward legislation. All recommendations in the report will receive the attention of Government and will be dealt with on their merits.
The Deloitte & Touche view
At Deloitte & Touche, based on an initial overview of the findings within the report, we share Government's view that the report will serve as a powerful tool in assisting the Isle of Man's search for standards of excellence based on international standards. We also support Government in their positive response.
The international business community is continually increasing the pressure on financial centres whether they are onshore or offshore to enhance the effectiveness of their fight against financial crime. Offshore centres are by definition more visible and therefore given the high profile publicity given to the release of the Edwards report it is in our view vital that Government's response must be exemplary.
The effect on existing and potential clients
What does this all mean for our existing clients and also those potential clients whom may be considering the Isle of Man as a location for offshore business? In the conclusion to his report Edwards expresses the view that the Isle of Man (and the other Crown Dependencies) have in place "infrastructures of legislation, judiciary, prosecution, regulation, and law enforcement mostly based on UK models which for the most part are extremely good for such relatively small jurisdictions". The initial impact is therefore to strengthen the reputation of the Isle of Man as a highly reputable centre within which and from which to conduct quality and legitimate offshore business.
Therefore existing clients can leave their structures in place with increased confidence. Those who may be on the point of setting up on the Isle of Man have no reason to change their decision. Both can gain confidence from the knowledge that whilst legislative change will undoubtedly result from the Edwards review some of which may be controversial it will only serve to enhance the ability of the Island to attract quality offshore business.
Further detail will be contained on this website as further matters of interest arise. In the meantime further comment can be obtained from Senior Partner, Peter Vanderpump, or International Tax and Offshore Partner, Bruce Taylor.
The full text of the Edwards report can be accessed via the Isle of Man Government website ( Click Contact Link ).
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 receive further information please contact June Cannell at:
Deloitte & Touche PO Box 250 Grosvenor House 66-67 Athol Street Douglas Isle of Man IM99 IXJ Tel: +44 (0) 1624 672332 Fax: +44 (0) 1624 672334 Web: Click Contact Link