Friday, November 07, 2008

Anxious eyes in Jersey . . . and elsewhere

This from the Jersey Evening Post today:

"SENIOR finance industry figures are keeping a close eye on developments in America amid concern that Barack Obama may act on his threat to ‘shut down’ offshore jurisdictions.

Stephen Platt, the chairman of local law firm BakerPlatt and an international finance expert, said that the Illinois senator’s accession to the White House could make life very difficult for offshore centres like Jersey. And he warned that his victory should set ‘alarm bells ringing’.

Geoff Cook, chief executive of Jersey Finance, said that he was ‘apprehensive’. During his campaign, Obama said: ‘I shall shut down those offshore tax havens and corporate loopholes as President, because you shouldn’t have to pay higher taxes because some big corporations cut corners to avoid paying theirs.’

He was speaking in support of the Stop Tax Haven Abuse Act, a bill that names Jersey, Guernsey and the Isle of Man as ‘offshore secrecy jurisdictions’ which have helped American citizens and businesses evade US tax. It proposes to take very tough action against such jurisdictions and those who use them."

They are right to be anxious. Financial services is the only serious export earner on the islands, and Jersey is probably more vulnerable than any other tax haven to external interventions like this. The islands' government has pursued a tax haven policy for the last 30 years, and having all the eggs in one basket, they don't have a Plan B to fall back on. We recently wrote about the Stop Tax Haven Abuse Act, here. Note from that blog that Jersey is mentioned by name.

Postscript: they seem to be worried in Switzerland, the Isle of Man and Liechtenstein, Bermuda, and Gibraltar too. And in a fair few other places. More on that later. And note these comments now from French President Nicolas Sarkozy, framing a common European position:

"There is a pretty detailed common position from Europe. . .We will be defending a common position, a vision ... for restructuring our financial system. . . . All countries agreed with this need. All have agreed with the need to take firm and ambitious operational decisions at the Washington summit. . . .We talked about the need to combat tax havens. . . .We want to change the rules of the game in the financial world."


Anonymous Anonymous said...

Jersey has been & indeed is now interested only in easy money.
It's tax haven activities have not only led to a culture of secrecy but also to corruption & injustice with most of the population happy to pretend that all is 'just fine' as long as that's exactly what they are told.
The irresponsibility of the Jersey States has been most obvious in not protecting either the tourist nor the agricultural & fishing industries.
Even the newer Fulfillment Houses are based on avoiding tax & are marginal at best.
At this moment they are blindly preparing to build a new £500 million finance center.
They now seem to think of themselves immune & omnipotent.
Jersey people DO have more than a few good reasons to be worried!

2:46 am  
Anonymous Anonymous said...

I bet this comment never gets published (that's justice for you!) but does no one appreciate that the USA is the largest tax haven in the world - and Britain does not fair much better with its non-dom rules. Anti tax haven policies are often ignorant and hypocritical.

As for Jersey being a corrupt and injust place - that is ridiculou. It is one of the most open and best regulated places to do business in the world.

2:11 am  

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