Jersey Finance welcomes the conclusions of the Review of British Offshore Financial Centres

The Review of British Offshore Financial Centres was announced by HM Treasury in November last year, when Michael Foot was asked to conduct an independent review of long-term opportunities and challenges facing both the British Crown Dependencies and Overseas Territories that had significant financial centres.

Published on 29 October, the report included an examination of how these financial centres were managing the effects of the economic downturn, as well as their overall ability to respond to major economic shocks. Issues such as implementation of international standards for regulation and information exchange were also reviewed.  

Jersey was regarded as performing extremely well in all areas covered by the review. It specifically highlighted the value that Jersey had provided to the UK throughout the banking crisis, as the largest provider of net deposits, in the region of $218.3 billion, to UK banks in the second quarter of 2009 alone. In particular it was noted that: “The Crown Dependencies make significant contribution to the liquidity of the UK market” and that the “decision to build up reserves in recent years during a period of rapid economic growth has served to increase resilience.”

The report also concluded that the amount of UK tax avoided by UK corporates using British Offshore Financial Centres was “significantly lower than estimates produced by previous studies have suggested.”  The Crown Dependencies generate significant professional fees for UK professionals and are an important contributor to London as a global financial centre. Jersey’s recent positive IMF assessment was also recognised. 

A number of recommendations were made, including calls for the UK to lead the way in global efforts towards achieving a level playing field, by calling on all EU Member States and third countries to move to automatic exchange of information under the EU Savings Tax Directive.