I blogged on Monday comment from the World Bank that it is the opinion of many that all the FATF inspired regulation of the world’s secrecy jurisdictions will have delivered no benefit in reducing illicit financial flows: the dedication and commitment of the world’s secrecy jurisdictions.
Then we got the news the IMF has rated Jersey the most compliant place with FATF requirements — which do not, note, deal with tax evasion.
And yesterday it was noted at the World Bank that Jersey does play a very off role in the world. How odd? Well take this as an example. Between 99.5% and 100% of all foreign direct investment in the following places is from Jersey:
- Djibouti
- Libya
- Turkmenistan
Take Turkmenistan. This was said of it in March this year:
The Turkmen government should use the opportunity of today's UN review of its record on human rights to commit to a genuine reform agenda, Human Rights Watch said today.
March 19, 2009 is Turkmenistan's final session before the United Nations' global rights body, the Human Rights Council, under its Universal Periodic Review (UPR) procedure in Geneva. Human Rights Watch urged the Turkmen leadership to demonstrate the political will to improve its abysmal rights record by accepting and then carrying out all recommendations made during the review.
What about Djibouti. This was reported in 2007:
The government's human rights record remained poor, and it continued to commit serious abuses. Human rights problems included the abridgement of citizens' rights to change their government; abuse of prisoners and detainees; harsh prison conditions; official impunity; arbitrary arrest and detention; prolonged pre-trial detention; interference with privacy rights and restrictions on freedoms of press, assembly, and association.
And we all know about Libya.
So let’s face the reality. As ever secrecy is not being used for benefit. It is being used for abuse. These investments are not in Jersey because of its wonderful tax or regulatory structure: they’re there because no one wants to own up to investing ion these places.
It is another of the crimes Jersey facilitates.
But then the place is set up for this purpose. My definition of a secrecy jurisdiction received praise here this week at the World Bank conference on illicit flows. It is:
Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain that is designed to undermine the legislation or regulation of another jurisdiction. They do in addition create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
It makes it clear to all: these places are set up to abuse. Jersey does.
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what is wrong with the fact that turkmen feudals are holding their money in jersey banks?
turkmen government has been a military ally of the us and the uk for years in the “war for democracy” in afghanistan and iraq and i guess that both of the liberators do not care about any human rights abuse in the region. and then why should jersey refrain from the cooperation with this country?
3 points.
1) Jersey implements all of the EU and UK sanctions. If a country or individual is sanctioned, all assets that are subject to the sanction are frozen and notification given to the Jersey authorities. So while you may not like some countries, the solution is surely for the global community to do something about it? After all, what would be the point of Jersey turning the business away when the work could legitimately be carried out in any other jurisdiction in the world?
2) Are you actually sure about this anyway? What authority do you have for the figures? I’ve never heard of work from these countries in Jersey, so I would be surprised, though it is possible.
3) If you hadn’t heard, Libya is now officially alright and Gordon Brown has personally wished the good Colonel a happy Ramadan. And as you maintain that the UK has full responsibility for Jersey, would this not imply that Jersey has a positive duty to support the UK government’s views on this? In other words, if Jersey said it would not accept business with/from Libya, a counter case could be made that Jersey is deliberately opposing UK foreign policy and ought to be brought into line.
Having said all that, I don’t disagree with the basic argument that we should be exerting economic pressure on all sorts of jurisdictions to improve their human rights. But Jersey can only follow a global approach: it can’t set standards that the UK, France and US (to pick 3 examples) would not even consider following.
You would think with abusive governments that secrecy is a good thing, if you and your family were an ethnic minority in a country with poor human rights surrounded by militia of the majority everyday, would you like them knowing:
1) you had money
2) your money was in an easily accessable place for them to steal.
Bravo to Jersey for teying to aid these downtrodden citizens in other countries, while the more powerful nations twiddle the thumbs
That’s right, Creg, because the downtrodden are able to access these markets with impunity, yeah?
I’ve heard that argument before. It’s rubbish.