We established Jersey Business to support local firms. We commissioned a review of Jersey’s financial services sector so we could maintain the success of the industry for the future and we published our Financial Services Policy Framework, setting out how government, industry and regulator would work together to shape the future direction of the industry. It is a mark of Jersey’s resilience and resourcefulness that it has retained such a buoyant economy, driven by our dynamic financial services industry.
In recent years we have seen jobs growth across the sector, improved awareness of Jersey across our growth markets and new product development such as the Jersey Private Fund. We have not been immune to global contraction in the banking sector and we have seen a change in the make-up of the industry. However, we have offset this with growth in the fiduciary and funds sectors. Importantly, we have welcomed a number of new names to our Island, particularly in the alternative investment funds community. So while there may be fewer jobs in banking, there are more in funds and trusts, plus the total number of people employed in financial services is now back to previously high levels.
Like many other jurisdictions, Jersey is facing significant economic, social and environmental changes. We are accustomed to adapting as the world shifts around us. In recent years the international spotlight has been shining on financial service centres. We welcome this focus and are one of the early adopters of global transparency standards. We can see that our long term future as a successful financial centre depends on our compliance with international standards and on being recognised as compliant by all the relevant international bodies.
This approach is working. We received an outstanding Moneyval assessment in 2016 and in 2017 the OECD’s Peer Review Group on Transparency rated Jersey fully compliant in all 10 of the areas reviewed. For Jersey to have been found to be entirely compliant in every single area is a fantastic achievement, underlining our commitment to combatting financial crime and tax abuse.
The EU Code Group has judged Jersey a cooperative tax jurisdiction. Their assessment followed an intensive year-long screening programme and reflects our commitment to the highest standards of tax transparency and information exchange. We have committed to working with the Code Group on their concerns over economic substance and they have accepted that commitment. We are now working together with industry and regulator, with appropriate engagement and consultation, to approach the Code Group’s concerns in the same constructive manner that has served us well in the past.
We are also among the leaders in the implementation of the OECD Base Erosion and Profit Shifting (BEPS) programme. Jersey is a BEPS Associate and a member of the Inclusive Framework, set up to ensure the effective global implementation of BEPS. Jersey is contributing to the development of the BEPS programme through exchange of information, participating on an equal footing with OECD, G20 and many other countries.
In June 2017, I signed, on behalf of Jersey, the OECD’s Multilateral Instrument. We were only the third jurisdiction in the world to complete the ratification of the MLI, which means Jersey became one of the earliest adopters of an international measure designed to stop multinationals from shifting profits between countries to avoid paying tax. As stated by the Director of the OECD Centre for Tax Policy and Administration, “Jersey is a forerunner in the implementation of the far-reaching reforms agreed under the BEPS Project”. This is further evidence of Jersey’s commitment to compliance with the international standards set by the OECD.
I have every confidence that this Island will remain an international financial services centre of choice, working together with the EU and other global organisations to meet the highest regulatory standards. It is important that we continue our programme of engagement with international organisations and that we keep valued international partners informed of our clear transparency standards. Then we will be in a good position to grasp the opportunities that come with the challenges ahead, like Brexit and other global developments.
As the Brexit process unfolds we are supporting our economy by representing Jersey’s interests on the global stage. We are working with the United Kingdom government, the other Crown Dependencies, other governments and institutions on Brexit, to ensure that Jersey’s voice is heard. In order to manage and maintain our successful finance industry in a changing environment, we will work together responsibly – government, industry and regulator – to sustain excellence and promote innovation; to keep our place in the world and to ensure a long term future for the industry that is so important for the services that sustain our community.
While Brexit will impact on our relationship with the EU, that is not our only relationship. Jersey has a global appeal and the fundamentals of that appeal, notably fiscal and political stability, tax neutrality, compliance with international standards and quality of service, remain unchanged.
We are focusing more effort on digitisation, both for the change it will bring to existing activity and for the opportunities it brings through technological developments like fintech and the Internet of Things. It is important to develop a clear strategic vision to embrace the digital revolution, creating an innovative, yet safe and secure environment for investors to do business.
Government, together with the industry, are actively monitoring the business environment. This is reflected in a Global Markets Strategy which is identifying business opportunities and the steps needed, like Double Taxation Agreements and Bilateral Investment Treaties, to help our industry take advantage of those opportunities.
We will work hard to maintain our reputation as an internationally recognised, well-regulated jurisdiction complying with international standards. We can comply with those standards while also remaining attractive to international investors and securing a business friendly environment. The future of our economic evolution lies in our ability to adapt, innovate and introduce new technology; as well as using our traditional strengths as an International Finance Centre.
We can look to the future with the confidence that stems from decades of successful evolution in financial and professional services. Our continuing success, recognised worldwide, is underpinned by the ability of successive generations to adapt to changing market conditions and business needs. We are not complacent. We keep our eyes on the future and work together in partnership – government, industry and regulator – to reach the shared objectives that will maintain a successful industry and a strong economy.