I also blogged my reply to Colin Powell asking for further information in response to the suggestions he has made.
Colin Powell has now replied to me, saying:
Thank you for your e-mail and I trust you had a good holiday.
As my previous e-mail was in response to your comments on Jersey’s performance regarding tax information exchange agreements I will respond to your further comments on this matter first.
On the subject of the number of TIEAs, I am afraid I am not able to give you the information in respect of the jurisdictions from whom requests have been received. We did initially quote a figure for the number of requests from the US but have been told by the IRS that they do not want this information made public. Other countries have expressed similar views. However, the current assessment of Jersey under the Global Forum Peer Review Programme is addressing how the requests received have been responded to both in terms of the quality of the information supplied and the time taken to provide it. The assessors will be reporting later this year, and the report will then be made public. What I can say is that the requests that have been received, from a total of five countries to-date, have been responded to within the time limits set in the OECD Model TIEA.
Information has been given to other jurisdictions on request under the TIEA arrangements and there are no “massive information hurdles”, as you suggest, placed in the path of an inquiring tax authority where a TIEA exists. Jersey is complying fully with the current international standards, and the requirements to be met set out in the Regulations are those in the OECD Model TIEA which have general application. There has been no suggestion made by any of our TIEA partners that they are finding the TIEA a “massive information hurdle” and they have expressed their appreciation of the cooperation they have received from us. As a Vice-Chair of the Global Forum Peer Review Group I can also assure you that the Peer Review process is not identifying the present TIEA framework as a barrier to information exchange. In due course automatic exchange of information may become an international standard. When this step is taken Jersey can be expected to follow, in line with its established practice of seeking to comply fully with international standards whether they be in respect of financial regulation, AML/CFT, or tax transparency and information exchange.
You ask for information on the EUSD. The number of voluntary disclosures each year since 2005 and the interest income declared is set out as follows —
Year Number of Disclosures Interest Income
Total Units of Currency
2005 (half year) 58,433 106.75
2006 61,600 242.18
2007 69,745 281.74
2008 74,138 326.96
2009 68,332 115.36
For those who did not opt for voluntary disclosure and where the retention tax is applied we do not have the number of accounts because this information is not required by the Member States. The total retention tax payments since 2005 are as follows —
Year Paid to Member States Retained by Jersey Total
£ mill £ mill £ mill
2005 (half year) 9.00 3.00 12.00
2006 21.90 7.30 29.20
2007 26.24 8.74 34.98
2008 26.72 8.90 35.62
2009 8.85 2.95 11.80
The format used for reports to the Member States is to be found on the following website —
Turning to your questions about company incorporation, Jersey is complying with international standards according to independent assessors — for example, see the high level of compliance identified by the IMF for FATF Recommendations 33 and 34. In the work currently being undertaken by the FATF on improving the application of Recommendation 33, Jersey, through its required declaration of beneficial ownership on company incorporation and more importantly its regulation of TCSPs, is often recognised as a leader for others to follow. If there is an established international standard that you believe we are not complying with I should be pleased to hear from you. In addition, can you elaborate on your points regarding company residence for tax purposes, and what information is provided by other countries on company incorporation in respect of companies formed by non-residents and with mind and management elsewhere?
Jersey’s position as a leading jurisdiction has recently been recognised in the re-election of the Director, Registry, in the Jersey Financial Services Commission, to senior positions on three international bodies. He has been re-elected as the chair of the international section of the International Association of Commercial Administrators which represents business registries of the United States and Canada. He has also been re-elected to the five member Board of the European Business Registry, and has been appointed Deputy Chairman of the Board and Rotating Chairman of the Annual General Meeting. Thirdly he has been re-appointed as website secretariat for the European Commerce Registries Forum, and is the primary contact for communications relating to the memorandum of understanding signed last month between the Forum and the Corporate Registers Forum.
As new international standards are agreed Jersey can be expected to comply with them. One standard that Jersey presently has in place and which Jersey believes should become an international standard is the effective regulation of TCSPs. FATF typologies on the misuse of corporate vehicles have shown that more could be achieved in the availability, accessibility and exchange of beneficial ownership information if TCSPs are as effectively regulated, and fit and properness requirements are applied, as in Jersey.
Adviser - International Affairs
Chief Minister's Dept
In the interests of keeping any one blog post to reasonable length I’ll be posting my reply shortly — and separately.