When I heard recently that Matthieu Pelloli , a French Journalist writing for Le Parisien had been emailing a number of Jersey Trust Companies I was not that surprised, given the Cahuzac affair has fired up the French media and rocked the very foundations of President Hollande’s administration.7 May 2013
Cahuzac was the French Budget Minister tasked with fighting tax evasion but was recently found to be indulging in it himself with an undeclared €600,000 in a secret Swiss bank account.
Logically one would expect the French press to then head for Geneva or Zurich, but there is little logic in play when it comes to the relationship between the French press and Jersey’s finance industry. It’s rather like the story of the fight breaking out in a bar, but the protagonists don’t hit the guy who started the fight, instead they hit the guy they always wanted to.
Instead of Switzerland, Monsieur Pelloli headed for Jersey and asked me why our firms were reluctant to be interviewed? Was it that they had something to hide?
Not at all I replied, they are just fed up of cooperating with the French media who pretend to have an open mind, but then write their stories in an unremittingly negative, accusatory and sensationalist fashion, with not a shred of evidence to back up their extravagant claims. Monsieur Pelloli’s efforts did not disappoint in this respect and his article of 29th April 2013 followed the usual pattern. Click here to view the english translation of Le Parisien article.
Tax evasion, avoidance, sham trusts and dark doings are all alleged, sprinkled with supporting statements from the usual culprits, including Mr Christensen of TJN, a former assistant economic adviser to the States of Jersey, ‘numerous French people chose Jersey’ he is quoted as saying. TJN has form in this area and will generally slate Jersey’s finance industry at any opportunity.
In the past they have described centres like Jersey in the following terms: ‘it is time that secrecy jurisdictions are recognised for what they really are: a full-on assault on the sovereignty of nation states, a direct attack on democracy, and a cancer running through the veins of contemporary capitalism.’
But not a scrap of evidence, not a single case, not even a name, are ever provided to back up these allegations, despite Mr Christensen claiming to work ‘undercover ‘ in Jersey for over a decade.
TJN periodically call for debates on the subject, a pointless exercise that would simply provide oxygen for their toxic mix of exaggerated claims and raw speculation.
Instead, if they are really concerned about wrong doing in Jersey and have evidence, they should produce it. I challenge them to do so. I don’t think they can, because there isn’t any evidence.
Back to Monsieur Pelloli, he enlists the support of a few ‘insiders’, who are prepared to spill the beans; conveniently for Monsieur Pelloli none of these ‘insiders’ are prepared to be named or identified.
The major plank of his attack is his assertion around the secretive nature of trusts. He paints a picture of an impenetrable secrecy vehicle governed by unscrupulous agents complicit in actively helping French citizens and others to evade their taxes.
What he either doesn’t know, or choses to ignore is there is no legal protection preserving secrecy for trusts in Jersey, and we routinely exchange information with the French Government through our tax information exchange agreement, including on trusts.
Pelloli receives further support for his views from none other than Deputy Montford Tadier, who is quoted as having said:
“There is a whole system of sham trusts. The latter only have one basic purpose: to allow foreign residents who set them up to disappear from sight as far as their tax authority of origin is concerned.”
If he is quoted accurately he is describing illegal non disclosure to home tax authorities. This is tax evasion and it is a crime in Jersey.
Deputy Tadier goes on to talk about a room at the airport reserved for concluding this kind of activity.
“Our practices deprive the French treasury of millions of euros”
When challenged on a later Channel TV report Deputy Tadier appeared to back pedal rapidly and attempted to move the dialogue to legal tax avoidance. Any objective reader of the Le Parisien article would find this difficult to reconcile. He now appears to ascribe his concerns to what he has learnt from ‘whistleblowers’.
So let’s address these allegations:
There are one or two inconvenient facts for Messrs Pelloli and Tadier, which would lead any objective observer to conclude that the assertion Jersey is full of sham trusts is in fact impossible.
What the journalist failed to print and what Deputy Tadier has either ignored or clearly does not understand, is that trusts including a sham trust in Jersey when used to defraud tax authorities are illegal. What is more, there are distinctive and powerful measures in place to detect illegal activity in the trust industry.
Jersey is one of the very few jurisdictions in the world that regulates trust service providers. Our trust firms are supervised and inspected by the Jersey Financial Services Commission. The client files of firms are inspected and examined, and sham trusts, if they existed, would be quickly detected.
But the defences don’t stop there. We have a law known as ‘All Crimes’ legislation, which places a legally binding obligation on any person who becomes aware of illegal activity, including the forming of arrangements with the intention of committing tax fraud, to report these to the authorities. These reports are then evaluated and followed up by the police through a financial crimes unit.
All of these arrangements are subject to independent external standards as set by the Egmont group, the Financial Action Task Force, the World Bank and the IMF. In addition, the application of these standards is subject to supervisory checks undertaken by these bodies. At the last IMF review, Jersey was described as a ‘Top Tier Centre’ and has been cited in the World Bank report the ‘Puppet Masters’ as an example of best practice in fighting financial crime which includes tax fraud.
If Deputy Tadier’s claims are any more than wild allegations he must be in possession of information regarding illegal activity, and he should pass this information immediately to the authorities, indeed he has an obligation to do so.
The Jersey Financial Crimes Unit can be contacted at the following;
An extract from the website follows:
We are always keen and willing to offer advice and to answer queries, and are willing to meet face to face if this assists.
The JFCU is staffed during office hours, 08:00 to 17:00 Monday to Friday. You can contact us by Telephone on +44 (0) 1534 612250, Fax number 870537, or Email JFCUAdmin@jersey.pnn.police.uk
I am deeply concerned at Deputy Tadier’s allegations and will be forwarding a copy of this article to him. It is imperative that if he has uncovered wrongdoing, it is tackled, and I know the authorities will be concerned to follow up any information he provides.
I will be contacting the authorities to alert them in any event, in order to safeguard the good name and reputation of financial services firms and workers, who continue to do a valuable and decent job for their clients.
The trashing of the honest endeavours of thousands of people by the French tabloid media is one thing, to have it done by one of our own elected representatives is quite another. I look forward to seeing Deputy Tadier’s evidence.