Guernsey – another one with its head in the sand

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The Guernsey Press is reporting the usual gibberish from local spokespeople:

Guernsey is ready to confront those who label it a tax haven, according to the Guernsey International Business Association.

Vice-chairman Paul Meader said he was tired of seeing the island being mentioned alongside harmful jurisdictions after UK politicians and the Tax Justice Network suggested it could be included on a new blacklist before the G20 economic summit.

‘If the UK wants to investigate offshore centres, then we say bring it on.

‘We see it as a great opportunity to differentiate between those that are not playing by the rules and international standards and those, like us, that are,’ he said.

Mr Meader demanded respect for the island’s system, which he said met international standards that many larger centres did not.

‘We are tired of getting lumped in with everyone else when we are demonstrably in the first tier of financial centres,’ he said.

I can we presume that some people are taken in by these acts of bravado. They are fools if they are.

As a matter of fact, I am absolutely sure that Guernsey will be on any new list of tax havens to be issued by the G20, whether on 2 April or soon thereafter. It is quite impossible to imagine that that list, rumoured to have at least 40 states on at at present, could exclude a place like Guernsey. Mr Meader is therefore setting himself up for a bruising.

But he is also showing how enormously out of touch he is. It is absolutely irrelevant how compliant Guernsey has been with current international regulatory requirements. Those regulations have very clearly failed the world. They are going to be scrapped. Tests of substance, not of box ticking, will replace them. Guernsey faces a real risk of failing those tests of substance.

Guernsey is a secrecy jurisdiction. It does not comply with international expectations on placing data on public record. It has not shown serious commitment to information exchange. It applies the withholding tax option under the EU savings tax directive. These are consistent indications of its lack of willing to play a proper role in a well regulated world financial system.

Mr Meader should listen to what we are saying rather than abuse us. I think he is heading for a train crash, both at the G 20 and subsequently when the UK reviews its own secrecy jurisdictions. Does he really seriously think that Gordon Brown can imagine ‘ outlawing tax havens’ and that Guernsey will not be affected?

If he does he is in for a rude awakening.