Tuesday, November 09, 2010

Back to the future: the Edwards report

Recently, while discussing the tendency for the UK to whitewash official reports of the tax havens that it partly controls, we pointed to a historical example from 1999.

The final version of the Edwards Report, as we mentioned, was a complete rewrite of the far more critical original version -- but when we blogged that, the original version was not available. Now, thanks to the splendid Offshore Watch, the original version of the Edwards Report is available again. This should be of great interest to historical researchers. (Download it and keep it, in case it gets knocked off the site again!)

Here is a sample from the original, leaked version of the Edwards report:
The main concerns related to conflicts of interest, customer disputes, and the activities of certain companies, company Directors and professional firms in the Islands. There were fears that Island activities were facilitating tax evasion and other forms of financial crime. Officials outside the Islands, while mostly complimentary, felt that the authorities could sometimes have co-operated better in the pursuit of crime.
And look at the published version, which is by contrast stuffed with this kind of material:
The Islands have rightly appreciated that tax advantages are a necessary but not a sufficient condition for success. Other elements are important as well. In these they generally have no inherent comparative advantage compared with the large centres. But they have worked hard to supply these elements as well:

Political stability
Respect for the rule of law
A good reputation
Good links with other respected Jurisdictions
An absence of corruption
Good laws, preferably familiar from elsewhere
Good systems of justice and public prosecution
Good law enforcement
Good counter-crime and money laundering regimes
Good financial and company regulation, preferably familiar from elsewhere
Good and honest financial institutions, including major world names
Good company and trust vehicles, preferably familiar from elsewhere
Good and honest professional and supporting services at reasonable cost
A good economic infrastructure
A familiar local currency
A familiar language
Good communications
. . .
and so on. As any Jersey resident will tell you, statements such as "absence of corruption" are nothing short of bare-faced lies. It is not for nothing - and we have extensive knowledge of the subject - that Private Eye dubs Jersey the Septic Isle.

We should also note the disclaimer in the leaked version, which applies to pretty much every "official" survey of secrecy jursidictions that comes out:
Offshore centres generally are sometimes criticised for maintaining tax regimes that induce businesses to desert onshore jurisdictions and deprive them of tax revenues. These issues lie outside the scope of this Report
In other words, let's ignore the stuff that matters.

This is an important piece of tax haven history.


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