G20 Cannes Summit Issues Final Declaration is good news for Jersey but troubling for World Economy
The G20 leaders summit issued its final communication on the 4th November 2011.
The declaration covered a range of important areas, including a global strategy for growth and jobs, steps to support the resolution of the Eurozone crisis, fostering employment and social protection measures, and building a more resilient International Monetary System.
Words of support came for Europe but no practical intervention leaving the EU with the still unresolved Greece sovereign debt issue. Whilst the official language was measured the Americans were clearly exasperated at the inability of EU leaders to sort out their own financial problems, leaving Italy in the firing line.
Other items referenced were the implementing and deepening of financial sector reforms, addressing systemically important institutions and risk, food volatility, climate change and developing country issues.
However the most relevant part of the communiqué as far as small International Finance Centres ( IFCs) are concerned is the reference to 'Tackling Tax Havens and Non cooperative territories'.
The language shows a disappointing regression from the previous approach which focused on cooperative and non cooperative territories with Jersey being very much in the cooperative, transparent and well regulated camp.
One can only speculate on the reasons for this, but France being in the driving seat may have had a bearing given their traditional antipathy toward small international finance centres. The frenetic efforts of NGOs to have 'Tax Havens' eradicated has not been successful but no doubt had some influence on the language chosen in the communiqué. Given the NGOs persistence in providing their supporters and the G20 leaders with poorly researched guesstimates on illicit capital flows and shock tactics such as attaching these figures to the deaths of children, this isn't surprising but it is highly misleading.
Instead the G20 has focused on the respective assessments of the Global Forum review on information exchange, the FSB on prudential matters, and the FATF in the area of AML/CFT systems and performance.
So far as Jersey is concerned this is good news as we have a very strong record in all of these areas, as can be seen from the following extracts:-
Global Forum Report on Jersey October 2011
Jersey: Jersey's combined Phase 1 and 2 report recognises the significant progress made by Jersey since 2006, to put in place domestic legislation and a broad network of EOI agreements to allow effective EOI. In addition, Jersey has created internal processes for its competent authority to respond to and make requests. Although some potential impediments have been identified in its domestic access legislation, this framework, whilst fairly new, has been generally effective and expeditious. Jersey has demonstrated an ongoing commitment to continue to work with its EOI partners, and is in the process of considering amendments to address the recommendations made in the report. See the EOI Portal page for Jersey: http://eoi-tax.org/jurisdictions/JE.
Financial Stability Board ( FSB)
The FSB report published for the G20 dated November 2nd 2011 identifies Jersey as an approved jurisdiction showing strong adherence to international standards of regulation and information exchange.
Jersey is in the top tier of countries complying with the FATF requirements
Attempts to undermine this exemplary record from groups of tax hobbyists and NGOs whilst seeing a measure of success in misleading some elements of the media and fellow NGO activists, is clearly failing to impress policy makers and regulators, in the face of compelling and empirical evidence of high standards of compliance.
They will continue however, as the groups taking this line cannot afford to acknowledge these facts given this would undermine their political agenda and raise serious questions with their funding sources regarding the veracity of their activities.
Jersey will remain vigilant and continue to demonstrate its compliance and high level of commitment to international standards.
The G20 programme will now continue with Mexico taking the chair but with some strengthening of the Troika arrangement, and the possibility of fresh injections of cash into the IMF. Next stop California 2012.
Meanwhile the EU and Greece stumble on in a dangerous game of brinkmanship which could ultimately undermine Italy, France and the whole of the EU wrecking the Eurozone in the process, a catastrophe which would almost certainly tip the world into full blown recession and financial chaos.