GUERNSEY’S finance industry could be under threat from the United States. In the wake of the 11 September terrorist attacks, the US introduced the Patriot Act as a means of denying funding to terrorist groups.

But Advocate Mark Ferbrache said that if it used a heavy-handed and interventionist approach to freeze allegedly suspect assets, financial institutions could find themselves caught in the crossfire because local legislation might forbid the client from being told.

Collas Day, where Advocate Ferbrache is head of litigation, is hosting a global fraud conference to examine the implications for the finance industry.

‘This conference is not only about how the Patriot Act is being used, but also about its potential for abuse,’ he said.

‘If the US continues with an interventionist approach, then it will represent a very real threat to offshore finance centres such as Guernsey.’

Advocate Ferbrache, who is a member of Guernsey’s Fraud Network, said that local financial institutions could face a serious and potentially fatal threat.

‘To the extent that the threat has been considered, or indeed identified, so far it has been only on a legal theoretical basis. The conference will examine real, empirical evidence of the US authorities intervening in transactions to freeze assets.’

The conference is on Friday at the Old Government House Hotel, with the subject of Suspicious Transactions and the Long Arm of the USA.

‘Guernsey has worked hard to establish its international reputation as a co-operative jurisdiction with high regulatory standards, as recognised by the IMF report. If the Patriot Act is abused, then the offshore jurisdictions will need to reassess their relationships,’ added Advocate Ferbrache.

The Fraud Network was created in 1995. Members are recruited by personal invitation only and linked via the Internet, meeting regularly to exchange information and discuss developments.

Members attending its conference will include Alex Layton QC, as well as specialists from Norway, Sweden, North America, Belgium, Germany, the Balkans, Scotland and the Isle of Man.

They will be joined by Advocate Paul Richardson and Christian Hay, of Collas Day, as well as an invited local audience for a series of presentations and discussions.

There will be an address by Deputy Bailiff, Geoffrey Rowland, and Stephen Trevor, of the Financial Services Commission.

* For information, contact Advocate Ferbrache on 723191.