More abuse in Jersey
Our attention has been drawn to an interview given by Andy Thewlis - Rector of the Parish of Saint John in Jersey. Mr Thewlis was until recently the Chair of Christian Aid in Jersey. He resigned earlier this year in protest at Christian Aid's engagement on tax justice issues. Interviewed in the Jersey Evening Post on 17th July he said as follows:
Jersey was and remains a well regulated international financial centre. To suggest that Jersey is otherwise does not measure up to scrutiny. The ongoing relationship of Christian Aid UK with the Tax Justice Network and Attac Jersey is, I believe, seriously misguided.
Priests in Jersey seem to have a rather close relationship with the local financial services industry, even to the extent of quitting organisations which raise legitimate questions about the tax evasion industry, the appalling state of financial regulation - not just in Jersey but right the way across the world - and ignoring invitations to engage in open debate rather than (let's be blunt) abusing their positions of power.
Mr Thewlis, like his colleagues Iain McFirbhisigh and Bob Key, did not bother to attend the public event we organised in Saint Helier in March. He has not been in contact with Tax Justice Network or Attac Jersey. He has not seen fit to address any of our concerns about Jersey, see below. A global crisis is building up: the catastrophic global failure to regulate the banking and financial services industry, and we stress that this is a global failure of truly incredible proportions, will be causing social and economic stress to hundreds of millions of poor people.
Faith communities have a part to play in trying to see a way through this extraordinary mess. But the established church in Jersey sees its role as that of a shill for the bankers. In addition to showing their ignorance of the issues we confront, they demonstrate, time and again, that they are unfit to exert any kind of moral leadership.
The litany of abuses perpetrated by Jersey is astonishing. Here is just a short selection.
First, read through this document on trusts - Jersey hosts £3-400 billion of assets held through these things, according to Colin Powell of the Jersey Financial Services Commission. Jersey trusts enable stronger and more devious forms of secrecy than are available in Switzerland. The document quotes one Jersey trust provider as saying:
"A trust is not a public document and does not need to be registered with the Jersey authorities. Furthermore, neither the settlor nor the beneficiaries will be the registered owner of any trust assets. As a result, a trust arrangement can be regarded as highly confidential."
Well-regulated? This is shameful business. On trusts, note this:
"In 2006 the States of Jersey degraded the island's trust law to allow the creation of "sham" trusts. These can serve no legitimate purpose, and therefore we must conclude that the purpose of this law was to encourage tax evasion to circumvent the European Union's Savings Tax Directive."
The trusts document also quotes an official Jersey website, on the islands' hopeless information-sharing arrangements:
"A high threshold therefore exists before the Jersey authorities will accede to a request under a TIEA. For example in the past year, there have been just four requests from the US under the terms of the TIEA. There is no automatic exchange of information under any circumstances and no ‘fishing expeditions’ for information. Strict confidentiality provisions in the agreement preclude any information being passed to third parties without the express written consent of the requested country."
There is more secrecy right there.
We also pointed, in a submission to the US Senate Finance Committee Hearing on tax evasion, to further abusive Jersey mechanisms:
- there is no or only nominal taxation on relevant income of non-residents;
- there is a lack of transparency of the tax and regulatory regimes, there is no public access to information about beneficial ownership of companies, no financial reporting requirement is imposed on tax exempt companies, there is no register of trusts and no information is collected about trusts;
- there is no requirement that the activities of non-resident companies have any economic substance in the island, i.e. the island is essentially a ‘booking centre’.
- Jersey allows for corporate and nominee company directors. This adds to secrecy.
- Jersey allows for nominee owners of private companies. This adds to secrecy.
Jersey allows for the redomiciliation of companies. This adds an additional layer of secrecy and complexity since a company registered in Jersey can leave at a moment's notice and re-appear in another jurisdiction where it will be safe from prosecutors. Or, a company from another tax haven can appear under a different name and continue its operations in Jersey.
Since early 2008, Jersey has allowed for the creation of unregulated hedge funds. Yes, you read that correctly: unregulated hedge funds. More here.
In the 1990s Jersey-based law firms -- especially Mourants and Ogiers -- created specialist divisions concentrating on the writing of the legal instruments used for securitisation of, amongst other things, the collateralised debt obligations that helped trigger the current economic crisis. These law firms have become world leaders in the creation of these toxic products.
Oh, and we haven't yet mentioned this.
"At the end of 2006, there were $491.6 billion of assets in the Jersey financial sector beneficially owned by non-Jersey individuals who were likely to be illegally avoiding tax on those assets in their home jurisdictions. Rapid growth of bank deposits and mutual funds shares in the first half of 2007 easily pushes the total above $500 billion."
And there is no better and more thorough source than that.
Do you really feel, Mr. Andy Thewlis, that you are able to defend your claim - that Jersey is well-regulated? How about defending this in a public debate in Jersey, with TV cameras in attendance? Bring any Jersey official you want to support your case.
We have challenged Jersey officials on this before. They have never accepted our challenge. The reason? They are scared (terrified might be a better word) of us because they know, deep down, who is right.
Any time, any place.