The OECD has announced progress on the establishment of the Global Standard on Automatic Exchange of Information. Colin Powell, Special Adviser to the States of Jersey has been a leading contributor to the establishment of this standard and has kindly provided the following commentary to coincide with the OECD announcement.
"The publication by the OECD of a Common Reporting standard for AEOI is part of a well-flagged international initiative to which Jersey is publicly committed and in which it is actively engaged.
In May 2013 Jersey committed to join the initiative of the G5 (UK, France, Germany, Italy and Spain) on translating the US FATCA Model into a single global standard.
In September 2013 at their St Petersburg summit the G20 Leaders stated “Calling on all other jurisdictions to join us by the earliest possible date, we are committed to automatic exchange of information as the new global standard….and we fully support the OECD work with G20 countries aimed at presenting such a new single global standard for automatic exchange of information by February 2014 and to finalizing technical modalities of effective automatic exchange by mid-2014.”
In November 2013 Jersey joined with 35 other countries in a public statement committing to early adoption of the Common Reporting Standard.
Also in November 2013 Jersey was appointed by the Global Forum on Transparency and Exchange of Information for Tax Purposes as a vice-chair of a new working group which will monitor the implementation of the new standard. This is a reflection of Jersey’s high standing as a jurisdiction that is committed to making a positive contribution to the development of global standards on tax information exchange.
The Common Reporting Standard will be implemented through procedures which will be determined by mutual agreement between individual parties to the Multilateral Convention on Mutual Administrative Assistance. Jersey will be such a party. The G20 wishes to see this process underway by the end of 2015. If this timetable is met information on financial accounts held in 2016 could be exchanged in 2017. It is expected that the first approaches Jersey receives will be from G20/EU members. As what will be required of financial institutions will be essentially the same as that called for under the intergovernmental agreements recently signed with the US and the UK these approaches when they are received should not present any unforeseen challenges.
If there is a single standard for AEOI that has global application it is believed that the Island’s competitive position will be enhanced. Business will not then be lost to other jurisdictions because they are applying lesser standards. It will be attracted to those jurisdictions that provide the best services. There should therefore be little if any concern for such international initiatives, whether they relate to tax, financial regulation of AML, so long as they are implemented globally on a non-discriminatory basis as is clearly the intention of the G20 in respect of the Common Reporting Standard."