This Is Guernsey

By Simon Tostevin

A UK Government review of financial operations in offshore territories and Crown Dependencies will achieve little, according to a leading Channel Islands lawyer.

Stephen Platt, BakerPlatt Group chairman in Jersey, said the review announced by Chancellor Alastair Darling in the pre-Budget report last year, would only be going over old ground as it would not be considering the constitutional relationship between Great Britain, the Crown Dependencies and offshore territories.

‘The IMF has only recently left Jersey, where it was carrying out its own review,’ said Mr Platt.

‘All of the Crown Dependencies and offshore territories are subject to regular assessments of their compliance with international norms of financial compliance.

‘The review announced in the pre-Budget report does not have within its ambit the consideration of the sufficiency of those norms. It can only re-examine compliance in light of them.

‘It is difficult, therefore, to see what will be achieved by another review.

‘The report, one would have thought, will confirm what specialist organisations such as the IMF, FATF and OECD have all concluded, that by and large the Crown Dependencies and offshore territories comply with international rules of financial compliance and indeed surpass many of their onshore counterparts.’

Mr Platt believes the motive for the review could simply be political and the UK Government jumping on a bandwagon that believes the Crown Dependencies and offshore territories comprise a number of ‘toxic jurisdictions’.

However, even that is not obvious, added Mr Platt.

‘One has to assume that there is some intended purpose to the review. Its vague ambit makes it difficult to assess what that purpose is.

‘If it is simply to measure financial regulation then it seems to be a waste of time and resources, there are already numerous independent reports on Crown Dependencies and offshore territories compliance.

‘One would have thought that the review will make recommendations for reform but given that is not concerned with the constitutional relationship of the actual rules on compliance, then it is difficult to see any suggested reforms being of much practical utility.’

He said it would also be unrealistic to believe that any meaningful understanding of financial regulation throughout the whole of the Crown Dependencies and offshore territories can be achieved by spring 2009.

‘The reality may well be that the review is simply a tool to achieve short or long term political goals.

‘What might they be? One school of thought is that the review is the equivalent of the UK Government kicking US concerns about Crown Dependencies and offshore territories into the long grass.

‘Rumour has it that there is little appetite in Westminster for the position of the Crown Dependencies to be prejudiced further at the expense of more business being chased away to Switzerland and Singapore.’

Article posted on 5th January, 2009 - 2.30pm