THE Pope has put most of the blame for the international financial crisis on offshore centres such as Guernsey.
Benedict XVI is the latest high profile leader to turn the spotlight on the Crown Dependencies in the wake of the global economic turmoil.
His message came in a reflection paper from the Holy See in which he estimated that the global fiscal deficit caused by offshore activities could amount to £175bn - more than three times the amount of global development aid.
‘To achieve a new financial agreement, a necessary first step should be to study carefully the hidden but crucial role of the offshore financial system in the light of the emergence of the global financial crisis and the inadequacy of development funding,’ the paper said.
‘Offshore markets were a significant factor in spreading the current financial crisis as they have given support to imprudent economic and financial practices. But they have also played a significant role in the imbalances of development, allowing a gigantic flight of capital linked to tax evasion. Offshore markets could also be linked to the recycling of profits from illegal activities.’
The paper was released in the run-up to an international conference to review the implementation of the Monterey Consensus held recently in Doha, Qatar.
‘Due to the political sensitivity and complexity of these issues, as they touch directly on the sphere of national fiscal sovereignty, it seems of utmost importance to enhance international cooperation in tax matters, in particular the need to address offshore financial activities,’ the paper said.
US president-elect Barack Obama has pledged to crack down on tax-haven abuse and before the election he co-sponsored a bill that named Guernsey.
And the UK Chancellor, Alistair Darling, also recently launched a review of the Crown Dependencies and offshore territories as finance centres.
Article posted on 9th December, 2008 - 2.29pm
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78 Article Comments
That’s rich coming from that lot. Talk about pots and kettles…
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“Offshore markets could also be linked to the recycling of profits from illegal activities” -
To single out a particular system for criticism in such a broad ranging topic is far too simplistic. All financial systems (both legitimate and illegitimate) are exploited by criminals, not just offshore jurisdictions.
Human greed has been around far longer than offshore finance and will continue long after its demise. If the Pope is going to take a Biblical view on the matter, the problem of greed begins in the hearts and minds of individuals and is caused by the sinful nature of humanity. Rather than blaming particular financial systems, perhaps the Pope would do better to preach the Gospel which attacks sin -the root cause of these problems - rather than the systems it exploits.
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I wonder whether I should send him a list of the things his backwards and entirely ludicrous system of belief has been responsible for over the years.
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The Pope should not be a front man for the Italian Financial system.
He is appointed to head up and preach to the Roman Catholics.
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I don’t think he was talking about greed. He was talking about the facilitation of the current meltdown. We savour our hedge fund managers and our privaty equity firms and our offshore brass plaque companies but we don’t really know what they all do. I do find it disturbing that every time someone says we “may be involved in dubious activity to the detriment of poor people”, a whole raft of defence comes up saying “so what?”.
Let’s see. The President elect of the USA, the Pope, global charities, global tax experts, UK politicians, EU politicians, well-researched pressure groups and countless informed individuals keep saying the same thing. Who comes to our defence? Islanders with vested interests and the foreign bosses of the corps that rake it in.
If I were us, I wouldn’t be so blase to write these criticisms off and start getting our act together. Swapping a few bits of tax legislation with a few countries will not stave off an eventual plug on some of our more esoteric operations, perhaps taking some of our prized, transparent legitimate ones with it.
There is, without doubt, a number of Guernsey incorporated companies and Guernsey adminstered Trusts that funnel money through for nefarious, and not so nefarious but morally dubious purposes. No one can prove otherwise apart from those that wish them to remain hidden from view. All the time we can’t prove it we will be under attack. It is up to us to make sure that not all of our businesses are tainted by a maybe misguided view that all we stand for is a fiddle. Which it isn’t. We must strive for transparency.
We must think about the influence that these speech makers have. Is GuernseyFinance a match for this constant harbinging of doom? Running to the closed doors of China may not seem a bad idea to them, after all.
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Despite the unique nature of the economic structure of Vatican City, and the fact that an accurate representation of Vatican City’s management of funds is not available, it is known that the two main sources of income (2003 revenue was estimated at US$252m - US Dept. of State) are 1) tourism and 2) international banking and financial operations. It is estimated that only half of this income is used to finance the work of The Vatican, and therefore it is logical to assume that the rest is invested.
The body in charge of administering all state finances is The Vatican Bank, which has evolved into a major financial institution, engaging in substantial worldwide investments yielding huge revenues in interest payments. These investments are shrouded in secrecy, but it is known that the main avenues of investment are banking and insurance amongst others.
Due to the opaque nature of the Vatican’s investments, is it a stretch of the imagination to muse that they themselves are likely to have, either directly or indirectly, received revenues from financial operations in OFC’s?
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The Pope is doing what Popes have always been very good at, mounting the high horse of hypocrisy.
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Guernsey, the popes scapegoat
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The vessels of the Catholic Church brim over with money taken from the poor, over many centuries.
It is amazing that any Pope should want to stick his head out of an ivory tower, gilded with ill-gotten gains of gold and precious stones and make such a crass and insulting statement.
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I read that 80% is government bonds and 20% in equity. But then I also read that offshore centres are whiter than white and that our covert instruments and skills in ‘helping’ those friendly megarich folk is nothing to be ashamed of.
We are all hypocrites except the innocent poor. If the Pope (and the USA for that matter) are so evil for ripping off the innocent then what does that make us? There’s no point railing against it.
For the record, I am deeply suspicious of all organised religion, as Vic Gamble says, the Catholic church didn’t get where they are today by being ‘nice’ about money.
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what’s he saying here ? that offshore centres caused the global meltdown.. incorrect right at the off the global meltdown was caused by improper lending procedures in the US nothing whatsoever to do with offshore centres.
I quote “Offshore markets were a significant factor in spreading the current financial crisis as they have given support to imprudent economic and financial practices” and what are those ? attempting to limit your tax liability, in what way is that imprudent practice. again a nonsensible statement and finally he accuses offshore centres of money laundering you think Mr Pope that if there were no offshore centres there would be no money laundering? who advises you ? might i suggest you find new advisers. Please stick to religious matters you clearly know nothing about financial ones
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Yes, Fast Robert, we are all hypocrites but surely the biggest hypocrite of the lot (especially when it comes to operating dual standards on ‘obscene wealth’) is the Catholic Church. Hardly surprising, though, when you consider the two thousand years’ practice it has had to get where it is today.
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I would say theres a very high chance some of the vaticans billions is in Guernsey.
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Do you remember the Archbishops of the CoE pontificating on the immorality of short selling, until they were reminded that the CoE Commissioners routinely lent shares to short sellers and so were equally culpable? verything went very quiet after that. Similarly, the Pope clearly is unaware of the role of Offshore centres. He might be interested to know that the Catholic Church Insurance Association has a wholly owned and regulated insurer in Guernsey, The Catholic National Mutual Ltd and incidentally benefits from the Zero-10 provisions.
How embarrassing, I guess he will have to close it down?
John
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SQ
Why so touchy? I don’t think he mentioned Guernsey by name.
Do you know the purpose of all the brass plaque companies incorporated here?
Do you know the purpose of all the complex financial instruments we administer here?
Do you know the beneficiaries of the opaque Trusts we administer here?
Do you know how multinational companies that make profits from cheap labour in poor countries move their capital offshore in order to maximise those profits for a few shareholders and directors?
Do you know how financial institutions set up offshore ‘children’ in order to facilitate the movement of capital and financial instruments (that may include the toxic stuff that started this renewed focus on our activities)?
No, most people don’t know anything other than the wage we earn and the home improvements we can make.
We must stand back and look at how the rest of the world sees us before we make illogical and childish attacks on our critics. The onus is on us to to make our operations globally compliant before we are forced to.
Transparency is the key. We are not transparent.
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Martyn
That’s not the point. The point is the more high profile the critics become, the more focussed the criticism becomes, the more open the critics are in the media, the more we will have to be able to prove them wrong. Shouting tosh and piffle will not deter them. The days of quiet, powerful friends in high places are less numerous than they were.
The thing is, it isn’t just people like the Tax Justice Network that are saying these things, they are becoming influential with very influential people, who are smelling rats in offshore operations (even though they may profit from them, it doesn’t look good for their PR - like an above post).
If it gets to a stage that we become pariah it does us Guernsey folk no good whatsoever. This industry will not last forever in this state. Best we cooperate and ensure future good dealings.
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people in glass houses should not throw stones…
The Pope is sitting on thin ice with those comments, where to start, haven’t got enough time (thankfully) …
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I feel a real expert should have his say
Posted by Daniel J. Mitchell
It is troubling so see collectivists (perhaps deliberately) confuse the acts of personal compassion and charity with the coerced redistribution imposed by government. This moral bankruptcy is particularly disappointing when it comes from religious leaders. The Pope, for instance, has launched an attack against so-called tax havens. As the UK-based Guardian reports, he apparently believes that low-tax jurisdictions somehow caused the financial crisis and he argues that the developing world will grow faster if corrupt politicians get more money to spend.
To read the full post, please click here.
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Well I’m happy to take the criticism for a bit of a downturn in the economy. But will the Catholic Church take any responsibility for its stance on contraception and the facilitation that ‘policy’ has had on the spread of certain sexually transmitted diseases.
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The Vatican/Catholic Church /Opus Dei, etc…don’t get me started. Biggest bunch of hypocrites ever.
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It may not be YOUR point, Fast Robert, but it is the point many of the posters on this thread, myself included. So just to reiterate, an attack on the morality of offshore centres/tax havens from the quarter of the Catholic Church contains not a shred of credibility because it is so loaded with hypocrisy. You can pontificate (sic) all you like about the inequities and iniquities of the world’s financial systems but - in this particularly instance - it really is a classic case of the pot calling the kettle black.
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Fast Bob, I completely agree with everything you’ve said. And when it comes down to it, who is the rest of the world going to believe? The small island of greedy, kiddy-fiddling, horse-bothering racists who’ve derived their opinions from a Dan Brown book or the US President, the UK Government and the freakin’ Pope!
Speaking of hypocrisy, I’d like to know if there’s anyone here who works in finance and hasn’t at some time doubted the legality or even just the ethicality of a transaction…
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Oh Dominic
Not Dan Mitchell! Please. A more rabid right wing anti democratic, anti humanity, self seeking and plainly wrong commentator on tax views has never been spawned. It is precisely this neo libertarian nonsense that has got the world in this hole in the first place.
Give me Nazi Youth Pope anyday, and I’m more Marx than Church!
Shame your pal Richard Murphy isn’t about….unfortunately I don’t have the detail to counter Mitchell’s raving.
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Fast Robert Dr Dan Mitchell would make very short work of Murphy in any debate that’s why he has ducked him in the past and of course an ignorant Guernsey finance hater would not know how he served certain administrations giving Government advice.
Please turn off the teachings of Chairman Mao and start to be loyal to the Island that feeds you. On this particular matter you know very little and not only do you not have the detail you do not have the knowledge to counter anything Dr Mitchell espouses.
All we get from you are sound bites that you have picked up in the Guardian
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Fast Robert re your ridiculous response to SQ of course we dont all know what everybody else’s Guernsey-administered trusts and companies actually do ? How could we and why should we ?
The only thing that is important is that the regulated service providers know exactly what the entities administered by them actually do, and the GFSC continues to ensure that very high standards are maintained by all fiduciary providers who are licensed to operate here.
I can assure you that my organisation knows exactly what 100% of our administered trusts and comlanies does but I certainly wouldn’t expect a bank or fiduciary up the road to know the same details about our clients or for us to know all about their clients.
Privacy does not equal tax evasion or dirty money. Strangely enough it is derived from the word “private”. Would you want a banner outside of your house stating what you earned and what you spend it on ? Would you take kindly to bring accused of all kinds of crimes just because you didn’t agree to it ?
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Well said student Bob !
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Student Bob - I don’t think anyone here is claiming that Guernsey, or any other offshore centre for that matter, is squeaky clean.
However, whilst Guernsey certainly shouldn’t ignore its ethical or legal responsibilities, we should not be used as a scapegoat to gain political brownie points.
Offshore finance is only one cog in the wheel of a huge global economy and not the main one at that. It is not the main cause for the credit crunch. Neither is it the cause, or source of all illegal or unethical financial dealings.
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fast bob you dont work in the finance industry this is clear. you mention in your first post the “facilitation of the current meltdown” which as i stated had nothing to do with offshore centres both you and the pope are wrong here. Guernsey is being attacked from all sides at the moment it is clear the government finances all over the world are going to be stretched in coming years and so it is this agenda motivating certainly the Americans rather than any responsiblity for the meltdown. they no for sure that OS’ had nothing to do with it but we are an easy target.
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as for your quote that we dont really know what our brass plate companies do.. all i can say to that is yes we do Bob we most certainly do. if we didnt we’d be shut down .
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Student Bob, I work in the finance sector, once in Guernsey now abroad. Of course people doubt legality of transactions and that is why we have strict laws concerning the reporting of such instances. You may be surprised to learn that people in large countries such a the US, UK, Italy etc etc also come across such practices as it has nothing to do with being on or offshore, it is simply the banking / finance system will always be a target for criminals. Perhaps we should shut the whole system down and the Vatican can keep all their money underneath their mattresses.
His statement is simple evidence that he his is poking his nose into an issue he clearly does not understand. Very dangerous for a spiritual leader…
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Let he who has not sinned cast the first stone, now who said that and in what book?. Perhaps it’s a book the Pope should read he may gain some guidance.
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SQ - you are quite right. Criminals will always seek to exploit banks, wherever they are and some “dirty money” will slip through the net (organised criminals can be pretty clever after all) however that is the same the world over - it isn’t just restricted to offshore centres. In Guernsey there are strict compliance and regulatory laws to ensure any suspicious activity is reported. I believe there are also pretty strict penalties, including imprisonment, for individuals (not just corporations) who fail to do so.
It is sensationalist journalism that cultivates the myth that Guernsey (and other offshore centres) is full of “man from Del Monte” style drug barons and arms dealers walking around with suitcases full of cash.
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Dominic
They did debate earlier this year. Dan Mitchell proved himself to be an anti-capitalist in his support for offshore finance centres. Capitalism relies on three basic tenets. Free access to markets, free movement of capital and free access to information so that the market can best allocate capital for the benefit of the consumer. Due to the inherent design of offshore financial instruments all three of these are denied to the average person. Only the rich and the large businesses can benefit. This creates monopolies and so the global markets are distorted. It is because of these monopolies that the system is failing us. Nothing really to do with tax structures but everything to do with the secrecy and the privileges unfairly given to the wealthy.
David, of course you’re going to defend it, you profit from it! I never said that privacy means ‘dirt’, it just facilitates it, that’s all. What it does mean is that some people get unfair advantages, and that is contra to all notions of capital led economies.
The Pope may be casting aspersions from a weak position but at least people are waking up to the fact that if we are going to fix the global economy, we are going to have to realign some of the more esoteric elements of the offshore world, a world that gives gifts to the megarich and the very big corps whilst the low/middle class (majority) inhabitants of those jurisdictions pay relatively high taxes to fund this generosity.
SQ
If Guernsey knew that it was harbouring companies that were involved in secret, fraudulent arms deals to Africa would they allow them to trade here? It happens….ask the SFO.
Arrogant complacency will be our undoing.
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What has it got to do with the pope?!
He should stick to saying prayers & keeping his own ’secret service’ underground…
Leave the finance to us mate…
I cant believe the head of such a corrupt & backward organization has the nerve to interfere with Guernseys finance sector!
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Fast Robert you are right Murphy did have a chance to debate behind the skirt tails of Jack Blum with Dan Mitchell after many years ducking a meeting. Dan Mitchell stands head and shoulders over every body on freedom and democracy. You with your Maoist thoughts would like the big states to rule with an iron fist your thoughts would mean only one thing the freedom for Guernsey to be eradicated and be run by Zanou Labour who have reduced Prime Ministers Question Time to a sham and the only interesting event was yesterday Brown proclaiming himself the saviour of the World.In the debate on the Green affair Douglas Hogg said it all when he charged Zanau Labour with “concealment, duplicity, whitewash, and cover up”I think this statement applies to many areas of the World. My worry is how much lower can we go? At least both Conservative and the Liberals had nothing to do with the sham of a committee formed to look at the Green affair.
If this is the way you want Guernsey to go under the jackboot I feel sorry for you because thankfully the majority of people in Guernsey love their freedom.
I have always said you would be much happier in a controlled State just like Murphy that would like to dictate to the people. The EU has not been able to write off their accounts for 14 years so I would say they need to get their house in order before picking on well managed areas and as David has suggested every body is entitled to privacy in countries that believe in freedom. The Catholic Church has thrived when people are kept down and poor and using Murphy’s figures does not show any balance whatsoever.
Have you ever listened to these people talk live? It is obvious you are an armchair pundit that most probably knows every verse of the Red Flag. In authoritarian or totalitarian regimes, the Govts of the day try to make those remits as wide as possible for them and as limited as possible for everybody else (Does this ring any bells with anybody here, look at the incompetent Govt’s Worldwide approach to legislation (Make it as loose, vague, all-encompassing and far-ranging as possible) and when that fails then don’t bother the limits and just ignore them.
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bob if someone put in an application to incorporate a company with the objects of “arms deals to africa” i am quite sure the GFSC would reject it. whether such a company has slipped through the net is another matter certainly i would hope there isnt a trust co. on the island stupid enough to allow such a thing. any financial transactions with african states should be subject to close scrutiny. Either way are you saying American delaware incorporations arent caught with such matters. American regulations are suprisingly the slackest of them all.
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SQ
I am not suggesting for one minute that Guernsey is any worse than anywhere else.
Dominic
Dan Mitchell does not believe in democracy because he does not believe in Government. The rest of your post is nonsensical and irrelevant. Your allusions to totalitarianism are the lazy arguments of ‘if you’re not with us, you’re a commie’, laughable really.
Back to the Pope, despite what people think of the darker aspects of the Roman Catholic Church’s history, he has the ears and hearts and minds of hundreds of millions. Dan Mitchell has the ear of a tiny select few of greedy elitist megarich individuals, a fringe player with a lot of media savvy.
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SQ - yup, but “tractor parts to Africa” is fine though isn’t it? And why just African states? Why not Eastern Europe? I’ll pretty much promise you that those Russian billions washing around here at the mo aren’t as sparkly clean as you think….
I digress (and I’m late for a lecture) do you really think that the Pope himself wrote his reflection? Or do you think he chatted it over with his Vatican bankers first? One of the only banks in the world to be untroubled by the global financial malarkey?
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Fast Robert your remarks sound like the politics of envy you seem to hate anybody with money. If you ever met Dan Mitchell you would find he is a man that believes in Democracy and freedom. And if you ever met Murphy he speaks like a Dictator that wants to lecture people and make no secret of the fact that he would like to see the Islands shut down and all the bankers to leave which would mean you might have to work on a farm. You really do make some stupid statements Dan Mitchell has been in the forefront of trying to protect these Islands from high tax countries that can not wait for the demise of all the young people’s futures. What a stupid thing to say he does not believe in Government when he has helped Governments he does not believe in high tax countries that exploit the people that eventually force the entrepreneurs to invest without red tape and legislation in areas that are fair.
Perhaps you believe in self destruction thank goodness the majority of people do not share your views. It would seem you share Murphy’s views and would like to see people down trodden and being forced to look for jobs abroad.
The Pope of today is not treated with the same reverence of yesteryear .The Church preaches to the people in Africa which is riddled with Aids not to use condoms hardly sensible.
Instead of all your waffle on Marxist and Maoist theories start thinking of your future because as I have said before you might not like what you wish for, would you rather lose your job and have to leave Guernsey to get the satisfaction of the banks being closed down. If you have to go to blighty the jobless figures are starting to mount up perhaps Richard Murphy might offer you a job.
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FR
As a fervent atheist, you and the Pope make strange bed fellows.
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Yes, do make up your mind Fast Robert. First it was ‘I am deeply suspicious of all organised religion…” Now it’s “….despite what people think of the darker aspects of the Roman Catholic Church’s history, he (the Pope) has the ears and hearts and minds of hundreds of millions.’ You’re beginning to sound like one of those ‘apologists’ you don’t seem to care for!
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The Pope it would seem is a puppet, expected to play the part and have a say on a problematic subjectof which he possesses no true answers. As practised in the past, point the finger elsewhere, no matter how false!
It was afterall the Vatican that desired the Templar’s Gold and subesquently their downfall, the Templars having created their own unique profitable Banks.
How ironic then that in present times, Offshore Centres such as our beloved Guernsey, whom are doing well for themselves are being targeted?
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I don’t understand Martyn. I can be suspicious but still understand that he has a large following.
Dominic, I think our respective opinions on what is ‘fair’ for some and what is ‘fair’ for others will never meet. I’m arguing that the market needs transparency to operate to its potential, I can’t see that as either Marxist or Maoist. Democracy is a tool for the public to have a say in governance. Small Government, as espoused by Mitchell and others, means less say for the public therefore less democratic decisions. I don’t see why the public should have their futures determined by unelected ‘entrepreneurs’ just so they can get rich. Not envy, just common sense.
There is an argument that says that countries should not compete against each other using the same models as businesses. When a business fails due to poor management and adverse trading conditions then so be it, presumably the market is mature enough to absorb the failed company’s market share and employment moved to accommodate this. If a country fails because of poor management that is an entirely different thing. For too long the models of competing countries have failed the majority. There needs to be cooperation to open trade borders, to harmonise tax laws, to give the market power to do what it can do best. Provide services and consumables where they are needed due to demasnd, at a price which is determined by free trade and fair use of labour.
The system is geared for the strong to squash competition. As can be seen in microcosm in Guernsey. Can local small businesses compete in this corporate tax structure?
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There is no such thing as a Global Fiscal Deficit (unless we can borrow from heaven. Is the pope the “banker” who is lending?).
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You are all missing one important point . . . .
The Vatican is a tax free entity - they pay no tax, so it’s hardly an endorsement by them is it?
The Vatican itself is it’s own financial institution with it’s own governance and financial regulations outside of the rest of Italy.
Pot calling kettle Mr Pope. . . .
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Ha ha isnt the Vatican worth more than Microsoft?
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Trawling through some old emails was a copy of very strong criticism of Murphy which was sent to him but he did not reply. Fast Robert might be interested in this
Richard I wondered if this is a fair assessment and more factual than the picture you often paint?
Regards
Dominic
January 16, 2007
No Justice In This Network
The so-called ‘Tax Justice Network,” a leftist high tax group, is back in the news because one of its less than brave leaders refuses to debate our colleague, Dan Mitchell of the Heritage Foundation of Washington, D.C.
To read the rest of this letter, please click here.
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The Pope claims to be the mouth piece of God, on earth. This means that my heavenly father is a terrible economist.
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Dominic
The tone, the language and the content is like listening to spoilt children. How come the US, the IMF, the OECD and other global, highly influential groups are using similar figures to those derided by these arrogant, self-interest groups? Shrill and anti-intellectual, only able to resort to personal insults because they have no facts to argue with, as Murphy proved in the debate that you keep mentioning ad nauseum.
As the Barclays have proved, when the wealthy don’t get their own way they stamp their feet and do everything they can to lash out, just because they feel it is a given right that the world should revolve around them.
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The Pope is pontificating - which is his job (amongst others).
For those of you interested the definition of pontificate is: To express opinions or judgments in a dogmatic way.
Defintion of dogma: Characterized by an authoritative, arrogant assertion of unproved or unprovable principles.
I rest my case.
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Fast Robert the figures used many times are plucked out of thin air. Murphy has not proved anything in debate apart from a dictatorial manner that at his bequest every body should listen. If Dan Mitchell challenged him to a one to one you would not see Murphy for dust. You really should hang your head in shame supporting someone that craves for the Island you live in shut down and all the young people that get wonderful opportunities in Guernsey with very bleak futures. How you can support high tax areas that crave for our demise beggars belief? I think most people are quite polite about somebody that makes no secret that his ultimate aim is to shut down all the tax efficient areas in the world
You at the moment live in Guernsey and you say how you love the place but if anything bad happens to the Finance industry you would be jumping for joy which is quite a contradiction.
Stop peddling the nonsense that Murphy gives out to whoever will listen and start to be loyal to the Island that feeds you.
All the time you make the wrong aspersions and insinuations of how this well managed finance industry really is.
Make no mistake about it if you support the Pope and Murphy and all the high tax areas that want to see Guernsey’s demise I really can not see any purpose in living on this beautiful Island. Why not illustrate how your perfect Guernsey would be why do you never come back on why the EU has not had their accounts written off for fourteen years? Instead of sound bites from your master Murphy and telling us how you hate people that have got wealth is really laughable it always sounds that you spend your life being envious of your Neighbour .
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Dominic
Have the Guernsey accounts been ’signed off’? Has the UK’s? I think you’ll find that the EU audit process, because of its reputation is probably very detailed. Can you imagine the task? It has always been a rubbish argument. Whether or not you agree with the idea of the EU, that is not the right line to take. It’s boring and false in its accusations.
Anyway, I wasn’t talking about tax ‘efficiency’ (never has their been such a false notion of efficiency), I was talking about capital transparency in order for the ‘free’ market to work at its best.
Why would futures be bleak? Nonsense scare tactics from a few wealthy people that will have their cosy lives inconvenienced slightly. Honestly, Dominic, Guernsey does not ‘run’ this industry, it is host to empty shells that take their orders from elsewhere. The people of Guernsey are what matters, they work hard at providing an environment where business can thrive, they keep the streets clean and the children educated. That’s what matters, not the livestyles of a tiny minority.
Your doomsday scenarios are based on the blatherings of nobodies. The internale conomy would still have to survive because people need things done. Just like they are done in the obviously despised EU. How do they manage without this fabled ‘tax efficiency’?
If you are a captalist then you must argue in favour of the basics of capitalism. Otherwise you believe in a minority, undemocratic, unaccountable rule. Nobody wants Guernsey ’shut down’, just the parts that hide businesses that distort market interests and opposes freedoms for others. Not soundbites (that’s what you are peddling) but plain old democratic principles.
They had the debate, Dominic, Mitchell was seen as a loser because he had no answers to questions of majority freedoms.
Jurisdictions must not compete with each other. See what it is doing to Guernsey. If the worst happens and we lose the ‘fight’ then what happens? By promoting cooperation and transparency we safeguard futures.
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Fast Robert you talk in riddles Guernsey knows to the last penny how much is spent where and on what and to who .You seem very sketchy on how business runs and with the EU who want to see our demise there are very good reasons why the auditors can not sign the books off just ask Whistleblowers Marta Andreasen, Paul Van Buiten, and last but not least Bernard Connelly who was head of the ERM who wrote the rotten heart of Europe.
It is apparent you have not got a clue on business or Politics and speak with ignorance on how further pressures could effect every bodies future.
I do not think you will get many people supporting the downfall of Guernsey as you seem to wish.
Dan Mitchell who by far is superior to Murphy in every way and would demolish Murphy in debate and as proved to you Murphy has ducked debate many times .You have never met Mitchell or many of the players in business and finance and If you were employed by me with your views that could lead to the demise of Guernsey I would show you the door.You arguments are off the wall and it is obvious you hate to see success which every young person has the chance to achieve if we are left alone from envious high tax countries.The large flows of money into the City of London from the Isle of Man, Jersey and Guernsey is good for Britain.
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Domonic might be right in claiming “Guernsey knows to the last penny how much is spent where and on what and to who”.
What we do know from various threads on this and the Editors Blog, that States Budgets are nowhere precise to the last penny.
Didn’t the new States Accountant say a short while ago that the accounts were not fit for the purpose?
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Dominic
They had the debate in April this year. Why don’t you understand English?
What is your measure of success, Dominic? Are we living in a ’successful’ world? Do you read the news? I think you are highlighting a very narrow view on the world. The global finance industry has proved destructive to the world’s poor and middle class tax payers, it is up to the people that run the industry to throw off this narrow-angled greed and use their undoubted expertise to improve the lot of the majority.
I’m not sure how you can interpret that as wishing the demise of anything, unless of course you agree that you are representing an argument that supports Nero fiddling while Rome burns. Without the poor and middle class tax payers the likes of the unregulated megawealthy would not survive. A bit like parasites.
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I can understand your frustration, Dominic, at the way Fast Robert continually shies away from answering any questions that put him on the spot. You will never get him to appreciate why he is in such a dodgy position with his constant carping about the industry that is, whether he likes it or not, the mainstay of the island’s economy and, quite probably, a significant contributor towards his own material wellbeing, whether he is directly employed by it or not.
Nobody, but nobody, is saying that this industry is whiter than white and many of us feel uneasy that we have nearly all our economic eggs in this particular basket. I have never myself worked in finance and I would say that some of the criticism that is directed at offshore centres is probably well founded.
What really does stick in the craw, however, is being on the receiving end of a ‘holier than thou’ lecture – whether it comes from mega hypocrites like the Pope and his Vatican mafia or tedious moralisers like ‘Saint Bob’ who pontificate from their own little ivory towers.
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The point is, Martyn, that someone has to remind us that we are not’ whiter than white’ otherwise we would constantly be existing in a position of naive ignorance. I believe Guernsey is in a very good position compared to similar jurisdictions elsewhere. I understand fully the concepts of due diligence and self regulation. The problem is; does the wider world think that? The whole point about me defending the Pope’s stance is that A LOT OF PEOPLE LISTEN TO HIM. By simply ridiculing these opinions won’t make global recognition change in our favour.
What questions am I ’shying away from’, Martyn? It’s easy to criticise when you haven’t got anything constructive to add. At least Dominic tries, and fails, by repeating stuff from two years back.
I support Guernsey’s finance industry, I don’t support opacity, public rule by unelected committee and downright lying about what really goes on. Our industry is only here because of benign policies in its favour. The real wealth is not based here but in the parent companies. The ‘funds under administration’ figures are not based here, just the management (it is those managers that get rich, not the Guernseyperson). The ‘trickle down effect’ is a temporary illusion. In the last ten years of finance industry boom we, as Guernsey ordinaries, have not had ten years of extraordinary wealth. The schools are still crumbling, our infrastructure is outdated, our decision making is based on ‘golf club relations’, our global recognition is only just starting (why is that? Did we prefer it when we were little known and highly secretive? It’s taken thirty years for some ‘marketing’ to happen.) Do you have any idea of the size of the supposed wealth that crosses this jurisdiction? And yet we still have illiterate adults, we still have a system of poorly paid public employees, we still have second rate mental health facilities, we still have empty family houses for 9 months of the year whilst first time buyers are living with their parents til their 35. The system is geared to service the wealthy whilst the majority pay through the nose to finance it all.
I have never said that I want the ‘end’ to our primary industry. It’s a classic childish counter argument that because I don’t like the way rich people control the majority then I must be related to Stalin, or something. Nonsense.
Anyway, just last year Guernsey was implicated in a massive fraudulent arms deal to Kenya. Widely reported but conveniently forgotten. All because of the opacity of our instruments. You can bet that it is more commonplace than the likes of Dominic realise. Is that what the hardworking Guernseyperson wants the rest of the world to know us for?
Dominic would prefer that Guernsey turns into a Monaco where the locals are kept out of sight while the mind numbingly wealthy feed off the spoils of exploitation. He’s actually used it before as an argument, he thinks Monaco is a true model of success. Short term nonsense.
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Murphy said he won the debate but all the people I spoke to said he did not and as said before Murphy has ducked out of every challenge of a one to one because Dr Dan Mitchell is superior in every way and has advised Governments from your remarks it is obvious you base your comments on some madcap idea that if the Islands were to have much heavier restrictions on them with pressure from the Pope the EU, OECD and Obama that every thing would be fine Any more restrictions will put up the cost of running the businesses and with that the flow away from the Islands to lower cost areas and to areas that are not under the cosh from the British Government.
Any further pressures could severely effect the future of these Islands and in turn the futures of all the young people of Guernsey who have much better opportunities than in Britain or Europe.FR you are both politically and business bankrupt in your knowledge of how the economy of Guernsey works. You have been put down many times from people in the finance industry your stupid off the wall ideals can not work and really your obsession in supporting attacks on these beautiful Islands beggars belief. You ramble on from one point to another and really can not see that what you support will kill Guernsey.
It is alleged you work in the finance industry and you can not see you might be one of the first casualties if all these threats come to fruition. If you have not got a finance industry tell me how Guernsey will survive? and how would you survive unless you are an eccentric millionaire?
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I’m siding with Dominic and Martin on this debate. I’m afraid that Fast Robert’s diatribes show a total ignorance of what the local finance industry is and how it actually operates. It also highlights his hypocracy of working in an industry that he so despises (but never mind, it pays him a good salary so that’s all right then).
I’ve got no problem with people who hold extreme left-wing views, but cannot accept the ridiculous inaccuracies and lies about the finance industry as seen through his eyes. Its not the same finance industry that the rest of us recognise and no, we don’t walk around with our eyes closed.
Fast Robert if you can’t stand the finance industry then get out of it (maybe your name is one of the first on the list at your employer when redundancies gather pace - it surely wouldn’t be a surprise to you) and if you despise the island, what it stands for and how it operates then nobody is forcing you to live here. If I hated somewhere so much then I would have left ages ago. Or is it that the local finance industry pays you a salary that you cannot get close to matching elsewhere ?
Don’t insult our intelligence by claiming that you are not anti-finance industry. Your clearly stated views blow that claim out of the water altogether.
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Dominic
Are you seriously saying that Guernsey will disappear? Anyway I agree that unilateral action will harm Guernsey. The only way to deliver anything like the ‘business utopia’ I have postulated is for global action. My argument is that we should be at the forefront in calling for change, as opposed to draining the dregs of a spent force.
But the rest of your stuff is utter hyperbole. Please be realistic about Guernsey’s position. It is a small town on a rock in a channel of water between a small island and continental Europe. The expertise we have here is mainly imported. The businesses are mainly shells of foreign owned interests that have no loyalty to the Guernseyperson. Yes, we do need them to invest (how much do they do? You seem to know), but strip that away and you still have Guernsey.
The politians have some sense in acquiescing to the industry’s desires, we are enjoying an economic and materialistic upturn but it would be a fool that says that this fawning will deliver the goods for generations to come. Whilst we have them on our side we should be heavily investing in infrastructure and future proof securities. Nope. We won’t, because those same platitudes contain clauses that enable the fly-by-nights to have their cakes and eat them.
Short termism can work if it is channeled where needed. That is supply side economics. The ideals of your chums and the opaqueness therein prevent this from happening. You fail to answer the main criticism of how it benefits wider society. They always fail to answer that. As a rich man, I should be responsible for my actions. Not in your book.
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Fast Robert unfortunately you say so many things that are idiotic I always write an up to date account of how things are I will say for the last time Murphy would not have a one to one debate with Dan Mitchell unless behind somebody else’s backing. Have you ever listened to Murphy or Dan Mitchell in the flesh are you speaking or communicating with these people on a daily basis the answer will be no. Unlike you I am meeting a cross section of people all the time and I get out of Guernsey frequently .
You again misrepresent and have no apprehension of how the local people in Monaco come first second and third they are given flats in prime positions are the only members of the Government and local family’s own most of the property much more than any other residents including Phillip Green and the Barclay brothers. You can not become a Monegasque unless you go through two generations. This seems to be your problem you make statements that are incorrect with reference to the EU that nobody would dare to write off their accounts as so much is not accountable the same people that want us obliterated for their high tax ideals.Martyn is quite correct you never answer questions and even when you do you do not come up with anything that is logical. You seem to read Murphy’s opinion and believe that he calling for bankers being put out of work and no future for the young people of Guernsey is justified.
You come up with some lame excuse that going against the Popes views which have been fed to Rome by Murphy is something we should all adhere to.
The senior people in the finance industry are well aware of the threats that face this Island they have been aware of them since Bliar came into power in 1997.
Just to make you happy Bob Bauman gives his take on statement made by Carl Levin just recently I will say it again your are naive if you think like Martyn explained if our banking is hurt it will have a knock on effect across the board which would be catastrophic for the young people that are the Islands future. How you can say you support the finance industry is laughable with all the statements you make.
December 12, 2008
Levin Sees Quick Anti-Tax Haven Law
The U.S. Congress, soon to be in increased control by the Democrats, will waste no time in helping President-elect Barack Obama to fulfill his campaign promise to “shut down the tax havens,” Senator Carl Levin (D-MI) predicted last week.
http://baumanblog.sovereignsociety.com/2008/12/levin-sees-quic.html
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Dominic
I trust that after you December 14, 2008 10:33 am outburst you are feeling better.
What Fast Robert suggests is that we accept reality and don’t live in a fantasy world with Guernsey at the centre of the universe.
The fact that the Pope has made such comments means many will believe it right. A bit like the Guernsey Press actually. Most readers think it is in the Press so it must be right.
You see Dominic it doesn’t mean it is right, but people will think it right, because someone in authority sadid so. Something of authority fallacy.
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Stephen John I know exactly what he said and if you think anybody in Government or the Finance industry are not aware of the threats that have been in the background you must have the same understanding as Fast Robert I certainly do not buy a lame excuse for his death wish for the Island .With regards to the Pope.EU, OECD, and now the USA people have known what to expect for years on their opinion on the Channel Islands, Stephen would you like more pressure put on Guernsey like your friend Fast Robert?
Just to remind you the last lot of measures that were forced on the Islands since 1997 have prompted both Islands to go to a zero tax to remain competitive and has given both Islands massive black holes. Jersey have had to introduce GST and have put great pressure with many added costs which has created many people living on the bread line. The same thing apart from GST has forced prices up in Guernsey thanks to Europe and the OECD.Richard Murphy quite gleefully is predicting the end of Jersey in the next two years. Fast Robert is looking forward to much more pressures on the Islands not something I would expect from a resident that earns his living in Guernsey and if he thinks any further pressures on the Island will have little effect he is more naive than he writes.
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Dominic
1 Fast Robert has said time after time he doesn’t have a death wish for the island.
2 What he is saying is that indignant denials (such as that of Stephen Platt) to any criticism from the US and the Pope etc will serve to put more attention on the islands, and perhaps, undue some of the spade work done by Guernsey government to assure the US etc that the dreaded secrecy has been replaced by transparency.
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Stephen I’m not sure how you can possible deduce that this is what Fast Robert actually means to be saying from his ramblings.
He may not “have a death wish for the island” but he unequivocally has a death wish for the Guernsey finance industry whatever his occasional protestations to the contrary. Either that or he really isn’t very good at pointing his points over.
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No Stephen they are your words not Fast Robert’s at every opportunity he speaks like a fully paid up member of Tax Justice you only have to look at his postings over the last two years to see where he sits. When you talk about secrecy many countries within the EU operate secrecy within banking.
Murphy wants and is urging the Pope, OECD, the EU and America for complete public transparency on all financial instruments that operate from certain offshore areas where pressure can be applied if this was the case Fast Robert would be out of a job and the money will move to other areas for no other reason that peoples financial affairs are private as long as they operate within the law.
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Fast Robert are you in agreement with these words from Murphy’s blog?
These vile tax havens have had their day
Nick Cohen is on form in the Observer under the above title saying:
Stopping tax exiles milking places such as Sark for their own benefit should not be a tough choice for Labour
http://www.taxresearch.org.uk/Blog/2008/12/14/these-vile-tax-havens-have-had-their-day/
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Dominic
Your comment “no other reason that peoples financial affairs are private as long as they operate within the law.” is just the sort that infuruates the US.
Read Senator Levin’s speech and you will see example after example of the US authorities being told that information about their residents will not be given. The reason is that the US residents have not broken any law in the particular tax haven.
The problem is that the US doesn’t see it quite the same way. They see some tax havens colluding with its residents to evade what the US believes to be taxes that ought to be paid to the US.
Reading the speech and the proposals it seem the Guernsey authorities have acted proactively in attempting to have the island removed from the initial list of bad boys.
Yes, there are dangers, and significant dangers, but I feel the view that trasparency will hurt us will not wash.
The futurs is precarious but I would venture that the future is far more uncertain for those who are effectively giving the US the finger.
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Stephen
There is a massive difference between (a) somebody relying on offshore secrecy to unlawfully evade a tax liability elsewhere, and (b) somebody paying all their taxes due but wanting to keep their personal affairs private. One is breaking the law and one isn’t.
Yes, we know that some jurisdictions like Switzerland and Cayman don’t regard tax evasion as a crime, but if a US person is unlawfully evading US taxes as a result of secrecy then its a very clear problem and its not hard to see why the US gets so upset about it. Will they be as upset re. Joe Bloggs who tells the IRS that he has a structure in Guernsey (which may give him some minor but lawful tax advantages), send them full details about the structure and pays all taxes due in a totally open manner ? Of course not.
Dominic’s reference to privacy is quite right. How would anybody feel if their personal financial details were available on the internet for all to see ? There is nothing wrong with privacy but there is plenty wrong with abusing that privacy to evade tax.
Privacy exists all over the world. Very few places in the world don’t have a basic right to confidentiality. In some cases its a statutory right (a bank officer in Switzerland, Austria or Cayman can be jailed for breaching confidentiality laws by disclosing clients’ affairs) and elsewhere its a common law right where the penalty would a civil one for breach of the general duty of confidentiality owed to the customer. Its not as simple as “offshore v onshore” but obviously some offshore jurisdictions like Cayman have taken deliberate steps to tighten up their laws to make it a criminal offence. In this day and age that can only be seen as a provocative act, but in the 1960s and 1970s nobody batted an eyelid.
Why should “private” companies have to disclose all about themselves on public record ? If they wanted to do that then they have the option of being a “public” company.
Does anybody trust their government not to lose or abuse information in its possession ? There are millions of British taxpayers who are horrified that sensitive personal information gets lost in transit or left on trains or sent to some overseas bureau for processing and lost in transit. Crooked tax officers have been exposed in several countries for selling personal financial information to blackmailers and kidnappers. Privacy is a basic human right and eliminating it is not the answer.
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Sorry, I’m just a lowly student, but I don’t understand Dominic’s comment “Murphy wants … complete public transparency on all financial instruments” - where’s the harm in that if everything’s hunky dory?
p.s. Loving Dominic’s Murphy vs. Mitchell Tax Geek Top Trumps!!
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David
The US poposoers of the Bill to curb tax hhavens would be totally in agreement with your comment There is a massive difference between (a) somebody relying on offshore secrecy to unlawfully evade a tax liability elsewhere, and (b) somebody paying all their taxes due but wanting to keep their personal affairs private. One is breaking the law and one isn’t”.
Reading Senator Levin’s speech makes it clear they see a number of jurisdictions as aiding those who don’t wish to pay the appropriate taxes. There are examples in the speech that suggest some of Guernsey’s closest competitors are acting as if they are on waccy baccy.
Quite clearly they haven’t read or understood the speech and intent of the proposed US law. It is equally clear that the Guernsey Government has read the situation well, and has positioned the island to the best advantage.
No one is proposing transparency that will lead to all financial records being posted on the Internet. The proposers of the US Bill make it clear what they means and how it might work
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As you say Student Bob you don’t understand and it might pay you to talk to a Banker that will explain to you all about having a level playing field and one day when you get a job you might understand what the word competition means in business. If you are not competitive in business you normally find it hard to attract customers or clients. It also might pay you to find out what a black hole means because to remain competitive Guernsey and Jersey will both have massive black holes in their respective economies. Unless you are the Son of Fast Robert I recommend you start to read some of Dr Dan Mitchell’s material it might enlighten you how free economies should work and how low tax areas as opposed to high tax Countries normally have better economies and full employment. While you’re at it read Bernard Connelly’s book entitled the rotten heart of Europe he was head of the ERM. As part of your education in commerce it would pay you to read David’s postings that are exactly accurate and have an expert appreciation on the mechanisms that operate within the very valued Finance industry.
It would seem from the little comment you make without to much content you like Fast Robert would want Guernsey to surrender to the limitless pressure which could make our economy flounder is that correct? And do you support the Pope?
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Stephen your reading of the situation is exactly the same as mine, which is why Guernsey has absolutely nothing to fear IF we get a fair hearing. As you rightly point out, there are other jurisdictions out there who don’t have a prayer of surviving the process, primarily because they started from a low tax compliance and have not reacted quickly enough to the demands for change. Many of those (but not all) are Caribbean jurisdictions.
Perhaps us being closer to Whitehall and Brussels and actually taking heed of the vibes will prove to have been a massive advantage over the more remote jurisdictions. The steps that we would have to take to become 100% acceptable to those who matter are not giant ones. In contrast there are many other jurisdictions who would pretty much have to start again from scatch with their finance industries and many of them will be incapable of doing that.
We are well-placed if we play our cards correctly and responsibly but we must not be complacent. It may even result in us having to take two steps backwards in the first instance but that’s a small price to pay to protect the island’s future. I’ve said numerous times on this blog and on the previous Press blog that we have to ensure that we operate in a manner which is totally acceptable to the UK, the EU and the US so that our industry is proven to be built on concrete rather than on sand. We have made massive strides already over the past decade to achieving just that.
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The British review of offshore financial centres will by led Michael Foot ex regulator and MD of FSA, and now reviewing performance of GFSC. According to Private Eye, Foots’ remit has been watered down and will cover tax only as it affects financial stability, sustainability and future competitiveness. The Eye concludes ”this should see the tax havens are safe for another generation or so…”.
This apparent support of the tax Haven might, at first sight be seen as positive for the future of Guernsey.
What it will do can be seen in the Stop Tax Haven Abuse Bill proposed by Senator Levin. You will soon see that this response of the UK is just the ostrich like approach that so enrages the US.
It is clear from the Bill and the speech of Senator Levin that the US appreciates it will not eliminate tax evasion over night. What it seeks to do is to have transparency agreements that will put the fear of hell into US taxpayers who think their overseas affairs will not reach the authorities back home.
It seems clear that those who help the US through transparency arrangements will get favoured treatment form the US tax authorities. Equally, those who continue to stress that none of their laws have been broken, or that their secrecy laws prevent them cooperating with the US will continue on the list of tax havens with little hope of being taken off the list.
Guernsey has positioned itself well, but unlike David ,I don’think the closeness of the UK has been a help as it seems. The UK is expected to find itself publishing a review that whilst clearing the tax havens, will only serve to increase the US will to pass the Stop Tax Haven Abuse Bill.as the UK expected whitewash will fail to address the issues the proposers of the Bill are so concerned about..
Instead of bellyaching about jollies et al we should compliment the Guernsey authorities on their skill in reading what the US is looking a for and delivering what is needed to stand a very good chance of being taken off the provisional list of tax havens whose conduct is unacceptable tom the US.
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If you live in a glass Vatican, don’t throw holy stones!
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Stephen the obvious thing for Guernsey to do is to not write any US-related business. The amount of US business written here is really small anyway, primrily because there is so little that can be done legally, due to their extensive anti-avoidance legislation. In effect, illegal tax evasion (i.e. non-disclosure) is the only thing open thing to most US citizens and they are most unlikely to bring that sort of business to jurisdictions such as Guernsey which actively discourage tax evasion and which have exchange of information agreements in place with the US. Places like Cayman, the Bahamas and Switzerland have aggressively sought US business for many years, underpinned by strict secrecy laws. That’s precisely why they are at the front of the queue to await Mr. Obama’s attack.
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David
You know better than I do about the amount of US business written in Guernsey.
It seems to me sensible and good business to have a positive endorsement from the US, something that might be a good selling point, if the waters around the tax havens get rough.
What say you?
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Stephen I couldn’t agree more. To have the US on our side wouldn’t half help our cause whenever Brussels or Whitehall get awkward. I’m not sure that we would ever get as far as a “positive endorsement”, but if we can ensure that we are off all of the relevant blacklists and maintain a reputation of being highly responsible in relation to illegal US tax evasion then that’s probably as close as we will ever get to one.
Some organisations over here (and for this purpose I am excluding offshore fund vehicles which are generally a less sensitive issue) will have a few clients with offshore fiduciary structures and/or bank accounts and investment management clients for US citizens which might have to be sacrificed, but my feel for the market is that these numbers would not be big in overall terms and that Guernsey could certainly cope with sacrificing that level of business without much overall impact. A small price to pay in my view.
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