G20 summit: will the week end in tears or TIEAs?

Wednesday 1st April 2009, 1:30PM BST.

CONFIDENCE in Guernsey’s position as a cooperative jurisdiction is building ahead of tomorrow’s G20 summit.

With the island and many other jurisdictions likely to come under the microscope of world leaders for their positions as so-called tax havens and offshore centres, a feeling has grown locally that Guernsey should have done enough to appease those who want it placed on a blacklist of uncooperative places, especially with the signing of three more tax information exchange agreements with France, Ireland and Germany last week.

And this week Chief Minister Lyndon Trott said Guernsey should expect a positive outcome from the London get-together of powerful figures including Prime Minister Gordon Brown and US president Barack Obama. He said the island was transparent, cooperative and well regulated and with 13 TIEAs there could be no questioning of its commitment to international standards.

Guernsey International Business Association committee member Mike de Haaff agreed and said the sudden rush of TIEA signings should not be looked on as a panic move. ‘Entering into these three agreements with France, Ireland and Germany will be positive for Guernsey, formally acknowledging its already good name internationally as a cooperative jurisdiction.

‘As already stated by the chief minister, the signing of these TIEAs has been under consideration for some considerable time and is not a last-minute event, despite the fact that they come in the run-up to the G20 summit.

‘By concluding these agreements, Guernsey will have formally entered into 13 TIEAs that conform to the Organisation for Economic Cooperation and Development’s standard agreement.’

Tax expert Graham Parrott, a partner at Ernst & Young, also felt the process the island had gone through lately should not be looked on as rushed because it had been going down this route for a while.

He said it should not matter how many TIEAs the island had signed if the issue looked at by G20 members was transparency and cooperation. If it was, he said, Guernsey would be fine.

However, if the other issue was scoring political points, then the island should worry.

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View more: Chief Minister news, G20 Summit news, Lyndon Trott news.

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Nolan

April 2, 2009 at 1:04 pm

I can’t help but feel that the frontal attack at the G20 summit on the proverbial tax havens is just a rather cunning media sensitive diversion.

The focus of the media on the incredibly inflated supposed losses in tax revenues onshore to the offshore, was inevitably going to appeal to the vast majority of voters who have no idea how offshore financial centers work. The vast majority will also not be aware that sending money to an offshore financial institution is nowadays not going to generate any significant tax savings. Indeed it is easier to set up an EU ONSHORE financial structure in many jurisdictions to gain very lucrative tax advantages.

As such, the offshore centres are being used as the fall guy to take the heat away from the failed regulatory policies of many of the major state bodies around the world.

You don’t need to be intelligent to be a politician. You just need good acting lessons and a taste for sensationalism.

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