12 May 2016
Letter sent to the Chancellor of the Exchequer,
George Osborne MP, on 10 May 2016
In advance of the Anti-Corruption Summit on 12 May 2016 I am pleased to confirm Jersey's willingness to join the list of jurisdictions that have committed to the recently launched initiative for the development and subsequent implementation of a new global standard for the exchange of beneficial ownership information.
Jersey will actively participate, as it has done in the past, in the work on the development and assessment of compliance of such a standard, which it is assumed will be mandated by the G20 and set by the OECD and/or the FATF, and to which all members of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes will be required to comply.
Jersey holds a leading position on transparency and exchange of beneficial ownership information which is critical for the successful fight against corruption, money laundering, terrorist financing, tax evasion and other financial crime. The steps Jersey has taken to-date in this respect are set out in an annex to this letter.
Jersey has considerable experience in ensuring that accurate and current beneficial ownership information is available to law enforcement and tax authorities and is willing to share this experience with international partners through technical assistance.
Jersey's central register of ultimate beneficial ownership (UBOs) has been in place since 1989 and the regulation of trust and company service providers (TCSPs) since 2000. This experience has been recognised by the World Bank, and Moneyval (the FATF style regional body for Europe) has included the following in the soon to be published report on its 2015 assessment of Jersey:
"Jersey's combination of a central register of the UBO with a high level of vetting/evaluation not found elsewhere and regulation of TCSPs of a standard found in few other jurisdictions has been widely recognised by international organisations and individual jurisdictions as placing Jersey in a leading position in meeting standards of beneficial ownership transparency."
Jersey is firmly of the view that for the recently launched initiative to be truly successful there must be a genuine global level playing field where there are no opportunities for criminals to take advantage of jurisdictions not in compliance with the international standards.
Jersey in joining those that have committed to the initiative is doing so on the basis that there will be an international standard that –
- is set by the OECD or the FATF based on a clear mandate from the G20, which calls for the provision of adequate, accurate and timely beneficial ownership information, in accordance with the FATF recommendations
- has global application through the adoption of a process that matches the application of the Common Reporting Standard (CRS) including a clear commitment to implementation and a formal process for assessing compliance on the part of all financial centres included in the membership of the Global Forum on Transparency and Exchange of Information for Tax Purposes
- matches the CRS in satisfying the requirements of confidentiality and data safeguards, and balances transparency against the privacy rights of those citizens who are not engaged in criminal activity
- includes an agreed date for the automatic exchange of beneficial ownership information in accordance with the standard. In advance of this date, while the standard is being developed, due recognition will be given, for example when assessing tax good governance for white and black list purposes, to those jurisdictions which have committed to develop and to adopt this new standard.
Jersey is also mindful of the need for legitimate business to be encouraged and for there to be recognition that well-regulated and co-operative international finance centres, like Jersey, have an important, positive role in facilitating international trade, the safe and efficient movement of capital and inward investment into both developed and developing countries.
Jersey is rightly proud of its reputation as an innovative and leading international finance centre contributing to UK and European economic growth through acting as a conduit for funds drawn from all over the world, and generally supporting the effective operation of world financial markets in support of global prosperity.
In conclusion I repeat Jersey's willingness to join the list of jurisdictions that have committed to the recently launched initiative for the development and subsequent implementation of a new global standard for the exchange of beneficial ownership information.
Jersey looks forward to cooperating with the UK and international partners in progressing this initiative as an international standard having global application. We will do so in continuation of our longstanding active engagement in tackling all forms of financial crime through the enhancement of transparency and information exchange.
I wish the Prime Minister every success in hosting the Anti-Corruption Summit on 12th May 2016.
Senator Ian Gorst - Chief Minister of Jersey
Reply received from the Chancellor of the Exchequer, George Osborne MP, on 12 May 2016
Thank you for your letter of 10 May setting out Jersey’s commitment to the recently launched initiative for the development and subsequent implementation of a new global standard for the exchange of beneficial ownership information.
I very much welcome your joining this initiative at this early stage. Exchange of such information on a global basis will make a marked difference to the ability of law enforcement authorities to tackle the abuse of corporate structures and other arrangements as a cloak to criminal activities, including money laundering, illicit finance and tax evasion.
Jersey's leading position
Jersey has taken a lead on global transparency as a cooperative jurisdiction, including through your early commitment to the Common Reporting Standard, your joining of the Multilateral Convention and the important role that you have played and continue to play in the Global Forum for Tax Transparency where you are rated Largely Compliant. This has been influential in helping achieve rapid global uptake of these standards and a step-change in global tax transparency.
I have asked my officials to ensure that arrangements are put in place so that Jersey, along with other committed jurisdictions, will be able to participate in discussions as the global standard is developed. It will be important, as you say, to ensure that the new standard respects the confidentiality and security of data and that appropriate legal gateways are in place. I also very much agree with your comments about the importance of a level playing field and hope that we can work together to convince all countries and jurisdictions to join this initiative.
I hope that you will be able to attend the Anti-Corruption Summit in London on 12 May which will provide an opportunity to set out how this initiative, together with the Common Reporting Standard and the other enhancements to global transparency arrangements, will make a real difference in tackling crime and corruption.