Graham Parrott.

A FEW months ago this column looked at the potential implications for Guernsey arising out of the upcoming US election.
Barack Obama has moved a step closer to the White House and it remains to be seen whether this will advance his ‘stop tax haven abuse’ agenda or if this becomes less important to him as he focuses on problems closer to home.
But while we await developments there with interest, there are plenty of other challenges on the regulatory front to keep the island more than occupied. And it is vitally important that these are properly managed.
Five years ago, following a visit by the International Monetary Fund, we were given a relatively clean bill of health but were asked to put in place a number of measures by the time of its next visit – which is due at the end of this year.
And we have been doing just that. For example, it was this that resulted in a significant change to our anti-money-laundering legislation at the end of last year. And earlier this year The Cash Controls (Bailiwick of Guernsey) Law, 2007, came into force.
It is this law that has led to the signs you will see going through into departures at the airport requiring any traveller carrying more than 10,000 euros in cash to declare it to a Customs officer.
And you may recall seeing the dogs at the airport recently, trained to sniff cash – judging by the apoplectic reaction from the dog sniffing my bag when I went through carrying 200 Guernsey £1 notes for a high-net-worth conference, this is an effective way of detecting cash movements.
So we will hope for a positive outcome to the visit in December, but without waiting for the result, the EU has seemingly prejudged matters to an extent by not including us on a white list of countries with AML measures comparable to the EU, which, interestingly, does include Russia. Instead we have been placed on an intermediate list of countries which might meet compliance regulations.
Condemned by our new Treasury and Resources minister as a political decision, we are lobbying for this to be changed and a good report following the IMF visit later in the year can only help. The IMF is also due to publish its own white list next year and it would be good to see us included on it.
But make no mistake, we are not popular with everyone – one particularly vociferous anti-finance-centre commentator responded to Deputy Parkinson’s comment on the EU white list as follows: ‘He can bluster all the way to Castle Cornet but no one will believe him. The fact is these places do not have the capacity or will to implement the legislation they have passed and the EU knows it. That’s why they need to be shut down.’
An extreme opinion, perhaps, but at the same time a challenge to us all and we need to be aware that this sentiment is out there.
And in the meantime, in case our regulators did not have enough to do, the UK Government has launched a Treasury Select Committee inquiry into offshore financial centres as part of its ongoing work on financial stability and transparency.
This is going on now, with written submissions sought this week and a possible visit to the island subsequently. The committee is asking a number of interesting and challenging questions and in answering these it is important that we are able to put up a clear and robust defence of the business we do in the island.
The past few years have seen a series of such challenges to the business we do here. We have taken on board tax information exchange agreements to satisfy the OECD – the second of those, with the Netherlands, signed a few weeks ago.
We have introduced equivalent measures to the EU savings directive and put in place zero-10 to deal with harmful tax practices identified under the EU code of conduct. We have done what the IMF has asked of us following their most recent visit to the island.
We now look forward to the next IMF visit, the Treasury review referred to above and the possible challenge from Mr Obama and those with similar concerns.
This does have the feeling of a regulatory Forth Bridge and is certainly a never-ending set of challenges.
We must continue to stay focused on addressing these as they arise and adapting to meet the seemingly ever-changing requirements.
There is no point in having a great product, important though that is, if people are precluded from buying it.