We are safe
Friday 3rd April 2009, 2:30PM BST.
Chief minister Lyndon Trott speaking to the local media yesterday after the result of the G20 summit held in London.
GUERNSEY can expect a massive boost to its economy after throwing off its tax haven stigma yesterday.
World leaders agreed at the G20 summit in London to publish a black list of tax havens which fail to meet international standards. Action will now be taken against them.
Last night, the Organisation for Economic Cooperation and Development, which helps governments tackle challenges in the world’s economy, released the news that Guernsey is now among 40 jurisdictions on a ‘white list’ of co-operative and well regulated places.
Another 38 economies appeared on a grey list. Four were blacklisted.The island’s chief minister (pictured) was delighted at the announcement. ‘I share the predictions of many of the senior figures operating in the financial services industry in the island that it’s difficult to imagine a more positive boost for the economy at this time,’ said an upbeat Deputy Lyndon Trott.
Sources have suggested it could even mean between three to five per cent growth in GDP at a time where the local economy is flirting with recession.
‘I think the opportunities for good quality business to come to the island over the months and years ahead has never been better,’ said Deputy Trott.
- A PDF of the OECD ‘black, grey and white list’ is available from the OECD website.
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It’s certainly good news for Guernsey, so I am sure that a number of states members are owed a good pat on the back.
However, I note that Brazil and India are not mentioned on the list. Why are 2 of the so called G20 not on the white, grey or black list at all?
No doubt all will become clear as to the importance of jurisdictions listings in due course.
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Good result but lets not get too carried away. Things are still pretty grim out there in the real economy.
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I welcome this announcement from the OECD and the hopeful boost to the island economy however this is not a time to pat each other on the back and rest on our laurels.
This decision has not suddenly fixed the island’s social problems, nor rid us of poor public spending. Neither has it provided adequate mental health facilities or filled the “black hole”.
Good news but not a time to look smug!
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Well done sir.
Please now put the same energy into developing other industries within Guernsey.
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Yes but we’re still on the list of tax havens..
And France, Germany and the USA are still leading the way in finding way to limit our bussiness..
More like a stay of execution
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Here we go again by the looks of it, Trotty being over-optimistic about growth figures, we’ve seen it all before and he’ll more than likely be as far out with this recent prediction as he was with the one about “growing” our way out of the zero-10 predicament. Stop spinning Lyndon, just be realistic and be grateful for the fact that we very narrowly avoided being included in the list of “less than co-operative” jurisdictions.
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Absolutely right, Concerned Guern.
Let this be a warning. Guernsey is not the Messiah. It has been a very naughty boy. Just ask any Lansbanki investor.
We are still not out of the financial doggy do-do.
Guernsey must diversify to ensure economic stability and logevity. Finance should be part of a more balanced portfolio.
Mono economies are just so risky. Remember the lessons of Tomatoes and Tourism?
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I am not wishing to appear negative, rather realistic. Is it that Guernsey has been given a seal of approval or rather that we have NOT been given a seal of disapproval? There is a significant difference between the two.
People have been doing finance business, of high and reputable quality, with Guernsey for many years. Surely being on the white list is not going to change this as this reputable business has, presumably, itself decided a long time ago that we were white else they wouldn’t have been doing the business. True the G20 result will ratify their assessment of us but is there going to be a flood of new business that has been waiting around for the UK etc to rubber stamp us?
And we won’t want anything coming out of the black and grey places by definition – I imagine the stuff in the grey places will sit tight until they become white.
The TIEA’s are not just for show and in the current climate some of the big countries will be working them hard, which may well affect us.
Being positive, it is great news that we are white and congratulations to those who have worked hard for this. I just hope we can control our new found exuberance and act in a mature way to ensure this Island progresses in a successful way. Beware that “progress” and “success” have far greater meaning than just prosperity. Social contentment, which is surely what we all see as a goal, does not come automatically from prosperity. Prosperity is merely an enabler of that goal, not the goal itself.
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Good not to be black/gray listed. However we need to remember that this will still be a very nasty recession which will hit the worldwide Finance sector badly.
I can’t see us not suffering as the markets aren’t originating many of the structures we’ve done well on administering these last ten years or so. The regulatory arbitrage of the shadow banking industry is likely to be curbed. As the German Finance Minister said (that G20 had agreed), no financial product, derivative or structure will be allowed to avoid regulatory and prudential capital rules if they collectively pose a risk to financial stability in the worldwide economies.
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This is certainly good news as we rely on the success of the Finance Industry for our economic prosperity.
However like a lot of places over these extreme bubble period, haven’t we forgotten/misplaced certain values? As John Ruskin said :
“There is no wealth but life; life, including all its powers of love, joy, and of admiration. That country is the richest which nourishes the greatest number of noble and happy human beings.”
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Let’s be clear on this. This is an OECD list. The OECD have always favoured the rich countries. The US administration have said that it would ‘take note’ of the list without endorsing it.
Let’s get anothing straight. TIEAs are practically useless for investigative purposes. I think we can count on the fact that Trott had to suddenly sign a few more agreements to satisfy the horse trading requirements that they are little more than lip service to transparency. Surely we would have been agitating before now if we wished to be seen in good light?
There will be story after story of how the rich and the multinationals abuse tax loopholes to save themselves any sense of social responsibility and the secrecy jurisdictions on the ‘white’ list can point at it and say ‘nothing to see here’. Just like always.
It would have been better to be black listed, make some domestic legislation to weed out the bad stuff, and then re-present our case, eliminating the scrutiny once and for all.
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This is indeed very good news for all of us in Guernsey, but is probably just clearing the first hurdle.
I am sure that the likes of Germany and France are well aware that many EU residents transferred assets to corporate or trust vehicles to avoid disclosure of interest earned or having to pay tax under the EU tax directive. These same individuals have ways to access and spend this income by using offshore credit cards for spending, settling the accounts offshore so no trace of the income exists in the home country. Easy and legal at present.
I would be very surprised if in the not too distant future the EU tax directive was not extended to include in some way companies and trusts, which would considerably reduce the attractiveness of these vehicles in low tax jurisdictions. This is big business here.
There is also still a lot of secrecy surrounding the settlors and beneficiaries of trusts and beneficial owners of companies which I guess other countries are also well aware of and will in future want to have more information about, so I do not think we can rest too easily just yet.
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Melc, actually we are not on the list of tax havens. We are in the same group as the UK, US, Germany, France, etc.
This is not an excuse to relax, as we need to continue to ensure that we are (and are seen to be) a well regulated jurisdiction that plays by the rules of international finance.
But despite what some of the papers would have you believe in the run up to the G20, no politician actually said that there is anything wrong with having a regime with lower taxes than the UK, or France or the US. And there isn’t.
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Arnald – you seem to believe that a person can only do business in their own country, so that they pay tax to the jurisdiction in which they live.
You seem to forget that the long established principle of taxation is that income is taxed where it is generated. That means that when a wealthy UK resident generates income for the first time, they will pay income tax in the UK. The balance is theirs to do with what they want. If they want to invest it overseas and pay tax on profits that money is made, and not repatriate the money to the UK, it is their right to do so. To suggest otherwise is an attack on personal liberty.
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My hope the Chief Minister Trott is correct as today the English Press has Guernsey and Jersey on the black list, does the minister know something they don’t,
Cynthia Hyam-Mooney
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Say what you will; about this affair, this borrowing, but never forget; One man’s meat is many other’s poison.
We have come to that time of the year when our Lord did not change His views; He paid the final price; as will Guernsey in the years to come.
There should not be a such a large piece of cheese to entice the already wealthy: the only way people will all be satisfied is when the 10, is altered; Then, and only then can the Ruling body call themselves “For the People”
Remember those words:
“I am glad I’m not like other men”
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I no very little about banking however I do know that the USUK brigade have messed up their own countries. So really as I dont respect them why should I care what they say. Guernsey politicians may make mistakes but generally they are honest ones can we say the same for them.
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Not only have the English papers given a negative slant – one of the bigger italian newspapers today has a rather damning article about the Channel Islands written by some chap who went to work in Jersey undercover so he could then write a report from an inside view . It makes the islands look bad. (the paper is La Stampa – the daily newspaper of Turin).
So I agree with previous posts – its more like a stay of execution
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>>the paper is La Stampa – the daily newspaper of Turin<<
Well, for city who’s sole claim to fame is a fake relic, I’m hardly quaking in my boots.
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TL… thanks
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We are safe? No we’re not. Look to other industries now before we lost more than we bargained for. We can’t trust what our erstwhile leaders tell us – and while I don’t want to rubbish Guernsey’s good name, it dosen’t count for anything out there in “the real world”.
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Graham
Well spotted. Brazil and India are not listed because they’re neither OECD members nor participating partners.
All
By the way, these are “progress reports” not black, grey or any other coloured lists.
I liked this one:
“Sarkdog Millionaire| April 3, 2009 at 3:49 pm
Absolutely right, Concerned Guern.
Let this be a warning. Guernsey is not the Messiah. It has been a very naughty boy. Just ask any Landsbanki saver.
We are still not out of the financial doggy do-do.
Guernsey must diversify to ensure economic stability and logevity. Finance should be part of a more balanced portfolio.
Mono economies are just so risky. Remember the lessons of Tomatoes and Tourism?”
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Once upon a time there was a lovely playground called Ellgee and all the nice boys and girls played there happily. There were swings and roundabouts and a little kiosk selling ice cream and lollies. Everyone was very happy.
Then one day some big bully boys came to the playground and took all the children’s lollies from them, making the good children cry.
The children ran to the grown-up people and asked them to help to get their lollies back, but each grown-up refused saying it was up to someone else to help. Round and round ran the children crying and asking for help, but nobody would.
In their despair the children went to the most powerful person they knew, the kindly park-keeper who looked after the whole park. Every child asked if the park-keeper could get their lollies back and when he heard their cries he threw the bully boys out of the park.
The park was a nice place to be again – even though the children haven’t got their lollies back……yet.
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Sorry to pour cold water on the celebrations, however the OECD is not the UK Government nor the USA and the accounts in Gsy that hold tax avoidance and illicit funds will still be pursued.
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