My blog on Guernsey's new foundations law landed me on BBC Radio Guernsey at 7.50 this morning (no doubt this can be heard again later today on their web site).
As usual no minister was willing to come on at the same time. Instead they issued a statement about how open, transparent and cooperative Guernsey is with other nations when it comes to providing information under tax information exchange agreements. So, they said, any government with a TIEA with Guernsey could make enquiry of it about who owned these arrangements and Guernsey would cooperate.
Let's ignore the near insurmountable hurdle to making a TIEAs requests for a moment.
Instead, as I pointed out, the main markets for these foundations are (in Guernsey's own opinion) China, Russia and Latin America. Now let's look at who Guernsey has TIEAs with according to the OECD:
Australia,
Denmark,
Finland,
France,
Germany,
Greece,
Greenland,
Iceland,
Ireland,
New Zealand,
Norway,
San Marino,
Sweden,
Faroe Islands,
Netherlands,
United Kingdom,
United States,
South Africa.
Do you notice any Latin American countries in there? Or China? Or Russia? No, me neither.
In other words this was blatant Orwellian misinformation by the States. These places can't access information on who might own these foundations, but they're the target audience for Guernsey Finance.
So, as I said on air, these are deliberate structures intended to help people from those places avoid or evade their tax responsibilities to their own governments. Making these structures available without information exchange facilities is tantamount to declaration of economic warfare on these states from St Peter Port. And it is secrecy that provides the essential weapon in this war - secrecy that Guernsey deliberately creates.
That's the only honest assessment that can be given of this activity.
I'll be curious to know what the response of the States is. And I'll also be curious to hear the response to the challenge that I laid down on air: Guernsey needs to tell us, openly and honestly how much data has ever been supplied to anyone under TIEAs. Then we can get a real idea of how transparent Guernsey is. I bet it's only a handful or so. And that will tear their claims to shreds Which is why I don't expect them to answer.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Richard
Surely the question isn’t how much information has been provided under TIEAs – information can only be given in response to requests under the terms of the freely-negotiated TIEAs. Information simply cannot be given without a request having been received without the jurisdiction and the organisation being sued by the clients for breach of confidentiality. Like it or not, that’s how TIEAs work and that’s specifically how the OECD designed them. Nothing more – nothing less. Information simply cannot be exchanged automatically by Guernsey (or any other jurisdiction) under a TIEA.
TIEAs can only be signed with countries who are willing to sign them. The “A” in TIEA stands for “Agreement”. An Agreement requires two parties. I am quite certain that Guernsey would very willingly sign TIEAs with any country which will agree to sign one. I am not aware that China, Russia or the Latin American countries have signed TIEAs with any jurisdictions at all.
But why do you place so much weight on TIEAs not being signed with specific countries when you don’t think they are worth the paper they are written on anyway?
I presume you’re paid by someone to place this stuff here – it certainly looks like PR guff from Jersey or Guernsey
And you ignore the fact that a) it’s nigh on impossible to make a TIEA request b) the Channel Islands are not offering places in Latin America TIEAs c) Jersey even played hardball with India
Please feel free to carry on apologising for abuse
I hope your conscience can carry the weight of the hundreds of thousands of children who’ll die from lack of medical care as a result of the denial of tax resources to them in developing countries hat is the inevitable consequence of the policies you promote
Lovely comment, Richard. I can see them all now sitting round scratching their heads trying to come up with a response.
Thank you for bringing The new Foundations Law to light. I had not heard about it but it certainly fits with what I think is going on in Hong Kong and China.
Thanks again.
Richard
I am not paid by anybody at all to place “this stuff here”. I tell it as I know it.
(a) I agree – but that’s what the TIEAs provide for. Guernsey did not draft or negotiate the wording for TIEAs as you very well know.
(b) I am not aware that the Channel Islands have been offered TIEAs with Latin American countries or whether they have been declined by those countries. Perhaps you know otherwise?
(c) Did it really? Are you quite certain of your facts?
I’m not apologising for abuse because I’m not aware of any. You are automatically implying that taxes will be avded as a result of Guernsey introducing a Foundations Law. That’s a quite remarkable conclusion to draw. On what evidence? You are therefore implying that Guernsey is actively seeking tax evasion business. I can assure you that it is not. Just because a TIEA is not in place with a country does not imply that its open season for tax evasion with that country. But then you will argue otherwise – without any basis at all of course. You seem to have no idea what type of business the Guernsey finance industry seeks.
As for your last paragraph – if legitimate tax avoidance results in such outcomes then sorry I just can’t see it. Tax evasion does what you say – not tax avoidance. Tax avoidance can be closed at at any time through introducing anti-avoidance laws to make domestic tax laws more effective, as has always been the case.
Carol – I can’t see any need for headscratching at all. Such inaccurate comments by Richard are seen for what they are – motivated entirely by his moral views and bearing no resemblance whatsoever to the real effects of legitimate tax and estate planning.
Prima facie there is no reason for anyone from Russia, China and Latin America to seek the secrecy of a Guernsey foundation but for tax evasion
No one needs secrecy to be tax compliant
All the proof is for you to supply
All but those who turn a blind eye to tax abuse know the real purpose of Guernsey
Richard,
Just to be clear, you’re saying secrecy has no value in the market place beyond just tax evasion? You can’t think of a single legitimate reason why a client would want to conduct a transaction in secret? Is that what you’re saying?
I am sure there are reasons why people want to keep lots of things secret
Andre Marr did
But the real reason is that they know they shouldn’t be doing them
And if they’re doing them in a limited liability entity I have always argued, and I am certain I am right, they have no right to secrecy
Transparency is the price of limited liability
Part of your argument does not stack up. Maybe you did not have sufficient time to complete your research. Because if you did, you would see that China does have a TIEA with Guernsey. I won’t post links because there are so many out there to choose from.
Well the OECDv haven’t noted it yet
Pretty good source….
And i bet it’s not in operation
Now answer for all the other states affected
In fact Guernsey did sign a TIEA with China on 27th October 2010 – it’s written on their government website. I therefore conclude that the OECD list you used (9th March 2011) has not been fully updated? Otherwise, Guernsey is lying, which is very unlikely.
It is also worthwhile noting that Russia, according to the OECD, hasn’t signed TIEA’s with anyone. My experience with Russia is that the country is so corrupt that there is no need to use any sort of offshore financial vehicles – the people with money just do what they want.
A few Latin American countries have signed but seeing as most of them has very favourable tax regimes fro both residents and non-residents they have no need to avoid taxes – or possibly evade them.
The PSG knows something about Guernsey.
It is not good…
Richard
Two years ago I was told by a very senior authority in the Chilean government that a request for a TIEA directed at the government of Jersey had simply been ignored. Other sources in Latin America have said that their governments hesitate about even requesting a TIEA since they know that the process of securing information is just too damned hard.
The acid test of whether TIEAs are worth the paper they’re written on is how many information requests are submitted and how many are fulfilled. Strangely, the OECD countries are unwilling to collate this data. Until such time as this data is provided, on a regular basis, there is no way of evaluating the success of the G20/OECD process.
best wishes
John
Premier Shareholders Group
How can you say such a thing without elaborating to back it up?
I could equally say that I know something about the PSG and its disgraceful….I don’t as it happens but its no different.
If ever a headline was misleading its the one on this thread.
There is no reference to your interview on BBC Guernsey on their website and no reference to it at all in the Guernsey Press. I don’t believe anybody in Guernsey is aware of your attack on Guernsey Foundations unless they’ve seen it on your site. It doesn’t seem as though anybody is listening to you.
Listened to the programme, perhaps?
You know, it is a radio station?
And they asked me on, so someone noticed….
Is it just you don’t like the fact that motivates you?
Richard
Well – several days on there has been no comment or follow-up either on the BBC or in the rest of the local media, which is extremely unusual if it was a subject which anybody was interested in. Make of that what you will!
No, it’s not unusual at all. Guernsey folk have proved themselves extremely relaxed about the whole concept. I say relaxed, it’s more apathy, but probably ignorance. We are quite happy being misinformed by the PR as long as we can ‘aspire’ to get a new car, at some stage.
I’ve been trying to engage with fellow Guernsey people around these subjects, all I get is a blank faces followed by abuse.
Challenging voices such as Richard Murphy’s has become a complacent and arrogant affair, so much so that official responses have become childish (see Cayman/Jersey).
The best defence it would seem that comes from the OFC that sits on the island of Guernsey is just to recite some marketing material. No substance, just salesman’s twaddle.
A few years ago, organisations like TJN and Tax Research UK were completely off radar (except for those that were originally nosey about the finance industry’s inherent unfairness). I think you’ll find that their (and others) profiles are well entrenched, and well read, within a short time frame.
So yeah, some people are listening, making some people question things more, which drives conversation and investigation, that makes more people listen. Just because you don’t, Stuart, means you haven’t thought about what is being said. But hold on, you’re posting on RM’s blog to say no-one is listening!
So it goes back to the childish angle.
Well put
Thanks
Arnald
My point is that I only heard about the questioning about Foundations because I saw it on this blog. I didn’t hear the radio interview and it hasn’t appeared in the Press and nobody has commented on it within my circles (which are 100% relevant to the topic).
I know a fair amount about the Foundation law proposals of course but absolutely nobody shares the concerns being raised by Richard (which I happen to believe are unfounded because he’s assuming a devious intent to use them which I simply don’t believe exists). I’m not actually sure that there will be much of a take-up of them.
I see on another thread Richard is referring to “avoidance of fiduciary duty” but that’s the very first time I have heard of that suggestion.
I’m sure you’ve not heard a thing.
Why should you?
You turn a blind eye to such things
Richard
That’s quite a bold statement – you don’t even know me!
And the answer is no I don’t turn a blind eye to any such things at all.
But I can’t see or hear something that isn’t happening as that would be an impossible feat.
Blimey – I can see why your attitude gets so many heckles up. Quite a bizarre approach for anyone to take. If you publish such comments then you must surely expect people to respond when they know they are inaccurate comments.
“Economic warfare being waged from St Peter Port”? I really don’t think so. At least not in the real world.
In the real world we know that’s exactly what you do
And that you deny it
But your denials aren’;t worth the paper they'[re written on
Because the goal of your industry is toi undermine the revenues due to legitimate governments
And in the process you seek to destroy democracy itself whilst consigning billions to poverty and hundreds of thousands – many children to premature deaths
Sleep on it tonight if you can
I couldn’t
If you can think what it says about you
And why I don’t trust you as a result