Guernsey: Country and Foreign Investment
The Edwards Report
In 1998 the British government announced that there would be a review of financial regulation and structure in Jersey, Guernsey and the Isle of Man. The review was carried out by Anthony Edwards, a former senior Treasury civil servant, and was published in November, 1998. Saying that 'the islands are in the top division of offshore centres' Mr Edwards gave the islands a generally satisfactory report, making a number of recommendations that applied to Guernsey. The great majority of these covered matters that were already in the legislative pipeline or were readily agreed to by the administration. Some recommendations however were more contentious for the island. It is fair to say that Mr Edwards himself did not expect all recommendations to be accepted. His report concluded (in part):
"They (the islands) have infrastructures of legislation, judiciary, prosecution, regulation and law enforcement, mostly based on UK models, which for the most part are extremely good for such relatively small jurisdictions. In many areas they have co-operated well, sometimes remarkably so, with the authorities of other countries in the pursuit of crime and regulatory breaches."
In 2008 the British government saw the need for yet another review of the Crown Dependencies (Jersey, Guernsey and the Isle of Man) in response to the financial crisis which rocked the country's banking industry throughout that year. According to the UK Treasury, the review, chaired by Michael Foot, Chairman of the UK office of Promontory Financial Group, will look at "the immediate and long-term challenges facing British offshore financial centres in the current economic climate," including: financial supervision and transparency; taxation, in relation to financial stability, sustainability and future competitiveness; financial crisis management and resolution arrangements; and international cooperation.
Another review questioning financial supervision and transparency, taxation in relation to financial stability and international cooperation in Britain's three Crown Dependencies (Guernsey, Jersey, and the Isle of Man) and six Overseas Territories (Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Turks and Caicos Islands) was released in late 2009. Authored by Michael Foot, former Chairman of the UK office of Promontory Financial Group, the report was largely complimentary of the way in which the Crown Dependencies conduct their economic and fiscal policies. Indeed, Foot concluded that these territories made a significant contribution to the liquidity of the UK market during his review, providing net financing to UK banks of USD332.5bn, with Jersey by far the largest net contributor. Foot also noted that the Crown Dependencies have good frameworks for tackling money laundering and terrorist financing, as recognised by the Financial Action Task Force (FATF) and that all three had met the Organization of Economic Cooperation and Development (OECD) standard for tax transparency by the G20 meeting in April 2009.