Jersey tops IMF league
Tuesday 15th September 2009, 3:00PM BST.
Chief Minister Terry Le Sueur
JERSEY has been placed at the top of the league of the 120 jurisdictions whose anti-money-laundering measures are assessed by the International Monetary Fund.
It was announced yesterday that the Island has passed the latest IMF inspection of its financial sector regulation with flying colours.
The comprehensive inspection was carried out in October and November last year by a team of six assessors.
Their report, the main section of which runs to over 320 pages, says that the Island is second to none in terms of compliance with the Financial Action Task Force’s 49 recommendations aimed at countering money laundering and the funding of terrorism.
The report concludes that financial regulation and supervision here are of a ‘high standard’ and ‘comply well’ with international standards. Specifically, the Island has been assessed as complying, or largely complying, with 44 of the 49 FATF recommendations.
Chief Minister Terry Le Sueur said: ‘We received a good report from the IMF in 2003, but this one is even better.’
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‘Jersey tops IMF league’, followed by ‘Deposits down by £21.7bn’
Is there a link?
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Great!! Although find that very worrying from what I have seen and experienced within the finance industry over the last ten years……
But of course, its the same old ticking the right boxes routine..coffee anyone?
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Hmm, do I hear the chomping of vast portions of humble pie being scoffed? The usual financial services detractors are very silent… Where are their cries now of “Oh, we’re so awful, we’ll be closed down..” Actually, we’re officially the best in the world! Bummer when the facts get in the way of your prejudices, isn’t it?
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Let’s just wait 20 years or so and see what the headlines are then. We can share information now, but will we take action when forced in later years?
Once president Obama and his subsequent equivalents both in America and around the world have finished with tax havens to stop tax EVASION, they will move to target the tax AVOIDANCE which happens with many millions of pounds here in Jersey.
The future is bleak, it is a shame no-one seems to realise this though. I’m not the only person worried about my pension and future social security, though.
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Pat on the backs eh chaps?!? Of course the propaganda States machine is in full-effect…. what about the every-day staff losing their jobs or no pay increases for “non management” staff etc etc..???
Really, who on earth do these people who are supposed to run this island think we are?!?!
Get out of your ivory towers & your leather chaired meeting rooms & help the small businesses & employees….. please!
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Great news (I think) I am really pleased to see that our chief minister is so excited. This is really going to perk up those demoralised public employees.
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I think a lot of it is to do with no protection for depositers,as people are still worried a bank could go bust.
Plus no interest on your savings.
Why would people wan’t to invest and save when they are not getting anything in return.
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BusterGut@1: Yes, there absolutely is a link;there’s a world-wide recession and there’d be an even bigger drop in deposits if we weren’t on the ball. Can’t you misery-mongers give any credit where it’s due?
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Is that because we have 53states members who worship the finance industry?
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Buster Gut # 1. “Deposits down by £21.7Bn” I have never been emplyed in the fiance sector, so I can’t say whether or not the ‘anti-money laundering’ measures have impacted on investments, to the extent you mention.
Could it be just anecdotal evidence that the drop was due to these measures, or have you any proof?
In any case, shouldn’t it be everyone’s view, that it is better to have a legitimate source of income, coming into the island’s coffers? If not, then why not?
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I admit we are very good at ticking the box compliance over here and this is all the IMF would have been able to see in their review period. But it doesn’t address the damage done by the securitisation and other off balance sheet structures that we helped facilitate and which even the investment “professionals” could never value. Something to really think about on this anniversary of the world financial system nearly imploding. How much is Jersey chipping in to the UK government for the bailout over there?
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Any facts that come from the mouths of regulators in finance and states are not taken for granted, money can buy you any status you like , how dare we question peoples integrity? Right? So.. great step towards Jersey becoming a vehicle for Hong Kong……
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To add Bella you are very right there.. regarding depositor schemes.. it also seems that Guernsey are on par.. funny that Northern Rock was registered in Guernsey because of their convenient company law structures.. in fact rather a lot of companies are registered there… oh dont you just love Commonwealth Laws!!!
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This is another set of flash in the pan, meaningless statistics and guess work.
The huge sums of money invested in the island mean that currency fluctuations produce variations from quarter to quarter.
We might as well talk about the house price index that is based on a tiny market with few transactions. With all respect to Dr Duncan Gibaut and his team, up or down by 1 – 2 % does not mean a lot.
The simple fact is that in 3 – 5 years time we will see a bit more than straws in the wind.
There could be a lot of restructuring in the finance industry over the next few years, the centre could shift towards the Far East as China asserts itself as an economic power.
The Jersey finance industry will not disappear over night but it may find itself in the same position as the hospitality or farming industries which have been managing decline over the last few decades.
We live in interesting times!
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Working in the finance industry and given the amount of legislation in place, I should flippin’ well hope Jersey is top of the league tables.
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I notice the political critics of this news are unusually silent about this report. Perhaps they will admit they never knew the whole story in the first place?
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James Deale #4
Obama no matter how good his intentions may be is pretty much powerless to change anything and his statements are nothing more than lip service to the annoyed American public after the financial collapse and bank bale outs. He is already following the corporate line who use legitimate jurisdictions such as Jersey to do business with.
If you think otherwise consider this – everyone said there would be a change to banking after the credit crunch and the fact that billions of tax payers cash was used to bale out banks. I maintained all along absolutely nothing would change and so far it appears I’m right; banks are still paying out huge bonuses whilst starving house buyers and business of capital with poor return on cash investment. Once they have built up their reserves again they’ll start loaning money to people who can’t afford it for short term gain. Greed will make sure of all this… However that is good news for our economy.
If you want to worry about 20 years time the biggest threat to this Island’s economy and the west in general is not that the system will change but that it will eventually all move east as the balance of power changes.
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We may well have legislation in place etc but unfortunately we have a lot of stupid people in control with no inquisitivity whatsoever and who are only interested in gobbing off how much wealth they can attract. No questions asked, you can make anything look good on paper when it suits FACT. And of course Jersey would be at the top of the league tables.. we tick the right boxes..convenient isnt it!!
The amount of people who are just so blind and can only see black and white and material things… and whos apparently who.. fooled yet again..
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In common with many other posts above, probably no surprise that there has been an absence of the usual nonsense as a response from Richard Murphy and John Christensen from the Tax Justice Network.
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17. Joker – Obama is not powerless at all. Tax avoidance is something numerous governments around the world should be are are concerned about. They can collude to force sanctions and close loopholes which will affect relationships with the islands. For now however, they are occupied with tax evasion.
The USA has, is, and is likely to always be in the belief that the capitalist society they promote will always fix itself. No wander they aren’t too quick off the mark to introduce sanctions on the banks they recently bailed out.
They will however have no reservations in correcting what they see as in injust loopholes in law, like those allowing tax avoidance – as long as the end result is in their favour.
Consider this – Vince Cable, Treasury spokesman for the Liberal Democrats openly said about 6 months ago that he would consider the offshore position of part-nationalised banks in order to stamp out their contradictory transactions (pulling tax away from the British government). How many people are employed by the Lloyds Banking Group? …that’s a lot of ‘jobseekers allowance’ to suddenly start paying out.
The threats are there. The need for action is now. Otherwise we retire in poverty and our children will be left to foot the bill for the huge proportion of dependant individuals (elderly), while those who have benefited over the years retire or chase further monies elsewhere in the world.
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James Deal #20
Sorry I’m not convinced. Obama cannot stop legitimate offshores from operating but he can stop American corporates from using offshores. As a result of that threat, large American corporates (Microsoft being one household name) have already threatened to pull out of the US and operate elsewhere where they can remain competitive. Obama threatens hold consequences for the American economy if he goes through with it making America extremely uncompetitive place operate from and that will surely be blocked by the Senate, who BTW seem to be more about personal agenda than real politics. What does he propose to mitigate his crusade… protectionism which would take the world economy back into the dark ages. No doubt there will be some change but mainly glossed over to look like there has been change like all this KYC red tape introduced after 9/11 etc. Business for the most part will continue as usual.
Vince C has been harping on for years but achieved nothing substantial. In the unlikely event he’s still around when the Liberals come into power they’ll all realise like Obama that business is best self regulated and will want their powerful friends in their pockets.
For anything to substantially change we would need to see an end to the market economy and capitalism as we know it.
Like I said the medium to long term threats to Jersey’s economy potentially come from the east not the west. Even if anything substantial was achieved by the incumbent administration by the time it comes into real force China will be the ones stating the way of play and not White Hall or Washington. Time will tell – and yes action is needed.
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Unfortunately Vicki, your puerile comments don’t tally with the facts. The Imternational Monetary Fund spent weeks in the Island, and months previously assessing submissions from the Island, to assess the EFFECTIVENESS of the measures we have in place. As stated, we came out TOP in the world. That makes your previous assertion that the IMF team was “bought off” ludicrously laughable. Of course, the hardcore critics are going to make stupid ill-informed comments, but the facts of this excellent and comprehensive assessment speak for themselves, despite the idiotic ramblings of some on this forum.
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Farmer Geddon, no one has made any implication that the IMF were bought off, things always look different when on paper, depends on who’s looking.
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Why do I have great difficulty in giving credence to ANY statement disseminated by the States of Jersey propaganda machine?
Answers, on a postcard please, to . . .
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Much amusement and bemusement about this today at the World Bank.
The univesal opinion from IMF people – this stuff is history. The IMF looks at whether the right pieces of paper are in place, not if they are used.
Jersey is great at constructive non-compliance – making it look like they comply. Half of all accounts subject to the European Union Savings Tax Directive for example opt for witholding – 99% certain in that case to be tax evading.
That’s not compliance.
As the conference is agreeing this is not the future of regulation. This is from another era.
The Island’s going bust (I notice £21.7 billion has left the island) and new regulation will hit very, very hard.
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Happy to oblige stomach ache
Please see here:
http://www.taxresearch.org.uk/Blog/2009/09/16/lets-get-jerseys-achievement-in-context/
And you may want to watch Panorama on Monday, BBC 1 20.30
Richard Murphy
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Farmer Geddon, you don’t know what you’re talking about. I don’t think you know what the finance industry does here.
Would you care to explain to enlighten me?
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Thanks Richard.. am so glad someone is internationally aware!!! You have just validated my comments,, International tax planners are laughing their socks off at us as per usual!! Farmer Geddon.. u should have gone to specsavers or start doing your job properly..
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Apparently my comments do tally with the worlwide facts that come from people more qualified to an opinion than you ;-0
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thanks Richard for providing the FACTS from senior bodies who are internationally aware.. my comments do tally with the facts and if you put your ego and hot air aside and look at an opinion which is more qualified to voice itself than yours.. my seemingly puerile comments are factual. FACT
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Good to see the usual nonsense is back in force.
The simple fact that nobody can deny is that Jersey better achieves internationally agreed sandards than any other jurisdiction that has been tested. Better than the US, better than the UK.
So anybody who is serious about wanting to stop money laundering will not be focussing on Jersey for many years: they will be focussing on those jurisdictions that are more susceptibale to being used by money launderers.
People like Richard Murphy do not like a system that favours the wealthy, and I don’t necessarily disagree with that.
However, by focussing on Jersey, they are similar to an animal rights organisation ignoring multinational fast food restaurants and instead trying to close down an organic butchers. It may be a legitimate target, but in any rational campign it should be very far down the list of priorities.
So really, it’s time for people like the “Tax Justice Network” and ATTAC to decide whether their priority is to stop tax evasion and money laundering, in which case they will stop attacking Jersey and focus their energy on other jurisdictions.
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Thanks Richard now who said my rambling were idiotic?
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The £21.7m drop in bank deposits is mainly to do with the exchange of information Jersey signed with the UK not so long ago. UK nationals with money invested in Jersey are transferring their cash to Litchenstein as that way they have a longer period of amnesty. So why is Jersey so corrupt if those individuals who hold cash here are now pulling out and placing their cash in more disputable offshores???
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Dollars and Roubles # 25 “The Island’s going bust (I notice £21.7 billion has left the island) and new regulation will hit very, very hard.”
Isn’t this loss more to do with the recession?
How much are other financial centres around the world losing? I imagine they are all experiencing losses…would you like about that?
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Does this mean people can now go back to sleep and carry on living off the fat of the land, as Jersey is complient with FAT Force 49?
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I am probably opening a can of worms here, but I remember back in the distant past (1970′s?) watching a BBC current affairs program (Panorama?) where the Government of the day in the UK was announcing swingeing tax reforms re evasion and avoidance,and they had around the discussion table the then current Treasury Minister responsible, together with two top tax lawyers from the firms of the day on such matters.
Having allowed the Government’s man free reign on his new proposals, the chairperson (A Dimbleby or Day or some such)allowed the two lawyers free reign. In under two minutes they had suggested perfectly acceptable ways around the new legislation that practically left everyone watching asking why the Treasury Minister had bothered in the first place?
The said Minister’s response was interesting, and to a degree a lesson in economic thinking which needs to be taken on board by all who advocate “Caste Iron” Tax laws today.
It was to the effect that to close all loopholes and remove all allowances by the use of watertight tax legislation would remove a necessary flexibility from the economic system which would result in economic stagnation, as it would be impossible to adjust legislation that proved to be too draconian in time to avoid it’s ill effects!
The same person went on to say that the purpose of tax laws was to raise sufficient revenue for the Government of the day to cover it’s expenditure on public services and items such as defence etc., not to maximize revenue to promote the Government as a competitive business in it’s own right!
I believe that certain politicians locally,Nationally and Internationally need to take this on board in our computer age where it is now possible to enforce endless and relentless legislation and enforce it to the extent that only the chosen few, and Government’s themselves, are in a position to carry out any sort of economic activity!
And as a word of warning to those who think otherwise, take a look at pre-revolution France or Russia if you want to see what ultimately happens when that situation comes about!(Or more recently the USSR if you want a post revolutionary situation)
The main point is that you need to maintain a sense of balance and realism when legislating on tax.
With regard to tax matters it is necessary to accept that there will always be a Black economic side to the bigger White side of the system.
If you remove economic incentive you remove economic activity and the result is economic stagnation.
At best Tax legislation should strive to contain the Black economy so that it is not of a size to threaten the White,and one of the advantages of low/no tax arrears is that they provide an environment where that can take place, and where:
a)It is possible to assess borderline situations.
b)It is possible to assess the size of the Black market economy.
c)where if necessary monies in the Black sector can be drawn back to use for more sound purpose in the White economy, subject to due process.
None of which is possible if you drive the Black economy totally “Underground”.
It sounds harsh and not at all “Politically Correct” but a balanced approach does cater for all the World’s economies and differences in defining what is an economically acceptable activity!
In other words it is a realistic not idealistic approach, and with time as the Global economic approach develops maybe the Black economic sector will shrink and become unnecessary as less developed countries catch up with the developed one’s, but human nature being what it is I wouldn’t hold your breath on that issue!
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ZBD £21.7 billion is more than just currency fluctuation, these are deposits leaving Jersey.
The new regulation governing how much a bank can lend against assets and capital will leave a £17 billion hole to be filled by our big banks.
7 months till the new legislation, 7 months for some of our big high street banks to make, save or somehow get £17 billion in cash deposits.
I hope I am wrong about the effects but those are the numbers.
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The Bank deposits have probably dropped as a direct consequence of the Italian tax amnesty.
The amnesty, which was part of an international crackdown on tax havens, has allowed many Italians to regularize funds held in foreign tax havens like Jersey.
Bank sources estimate that Italians have about 600 billion euros stashed away in offshore centres and the amount repatriated this time is expected to be more than 80 billion euros.
Italy also pushed through a decree ruling that any funds found by the authorities in tax havens would be considered an attempt at evasion unless the holder could prove otherwise. And as many offshore centres have agreed to relax their bank secrecy rules and help foreign governments chase tax evaders, regularization was an opportunity for the Italian tax-dodgers to come clean.
Farmer Geddon
I don’t want to knock Jersey but you really should read the full report (and other reports) before singing “We are the Champions”…all that glitters is not gold!
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Unfortunately the captialistic system, driven by greed and self service, is doomed to failure as it is functioning as if it was working in an infinite world of unlimited resources and manpower. Reality says otherwise. Once resources are depleted beyond the point of no return the whole system will implode as money will be shown to have zero value.
Money in reality is all but worthless, it is just that the majority don’t realise this yet, and as they perceive it to have value they go along with this system of make believe. It is only at times of economic stress that people start to see through the veneer and runs on banks occur.
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Its funny how we are crowing on about this IMF report when Monday’s Panorama is going to show a banker in the Jersey branch of one of our big bank’s telling a potential client how to get round the EU Savings directive rules by a little ruse on the transfer of income to one of its non-EU branches/paying agents! Probably not the only financial institution over here pushing this little wheeze or similar scam.
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Panarama tonight should be rather good according to Radio 4 and it is about Jersey. I recommend everyone watch it to see what can happen.
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Richard Murphy, your blog sums up your misguided views nicely, when you say Jersey’s achievement “does not mean it does anything at all to stop the crime”. Actually that is exactly what it means. The sole purpose of the compliance requirements is to prevent money laundering and financial crime.
I can only assume (based on the above and the example behaviour listed in your blog) that your reference to “crime” is actually a reference to tax avoidance as opposed to money laundering or financial crime, otherwise it would make no sense.
If so, not only is your comment on the IMF report off-point, your views are also misguided generally because to place the burden on Jersey to stop tax avoidance is a nonsense.
It is not up to Jersey to change its rules to suit ‘on-shore’. It is for ‘on-shore’ to prevent its taxpayers from taking advantage of foreign systems of law.
Of course, even you must know why this will never happen – namely because offshore actually benefits ‘on-shore’, e.g.
- tax competition ecouraging growth – savings enabling reinvestment,
- the creation of a large sector of the on-shore financial services industry providing massive employment and the highest contribution per sector of income tax to ‘on-shore’ coffers.
- tax-competition taking ‘on-shore’ fiscal policy in a more productive direction (i.e. lower taxes), governments being encouraged to decrease taxes and be careful with their budgets, rather than having supertaxation (as was seen in the days before the haven): people are misled by campaigns such as yours into thinking that offshore costs them more money (i.e. that they would pay less if it wasn’t for tax avoidance), in fact the opposite is true. If there was no tax competition, on-shore would be likely to revert to the days of super tax at 60%+.
- enabling the protection of people who are subject persecution in regimes that have poor human-rights records where people with assets are often targets.
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People bigging up the 21bn loss should quieten down, it amounts to under 10% (under 5% if you include the amount in funds adminstered here) Easily explained by the exchage rates – the Euro being 25% stronger than sterling and the dollar even more so.
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Vicki, 28, 29 and 30 etc… Do calm down … Richard Murphy has had an agenda for years. Hysterics do nothing to support your argument. Mad foetus at 31, is quite right, and his opinions are expressed calmly, with evidence. You know it makes sense…
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Does anyone think that some of the money went to say HONG KONG !!!!!!!!!dont think so Jersey would’nt do that would they ? well not unless there was a fat fee involved
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That Lloyds bloke on Panorama tonight is toast.
Firstly for his answers to the questions, secondly for bragging about his new Porsche, thirdly for not realising that he was being set up.
You do wonder sometimes…
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Can we boast about having high viewing figures on Panorama now.
Nice shots of Jersey I have to say, lets put a positive spin on this, at least our constructive non-compliance is in sunny place.
Made Jersey look better than the tourism dept ever have.
The BBC are still coming and going from Jersey so what’s the next BBC story?
Answers on a naughty seaside postcard.
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The Lloyd’s bloke is likely to become the star of one of the most downloaded You Tube clips this weekend.
But no publicity is bad publicity as they say.
In the long tern Jersey Finance will realise just how positive this was for the island!
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With friends like this Jersey finance really does not need enemies
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Jeezlouise
Do you care to back up your claims with some reality?
Parasites get fat while hosts die.
Whose standards of living are being eroded by the financial system, bankers or people completely unrelated to banking?
If you call that good business then you need help.
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I thought the guy on Panorama was a complete tool. However, I also thought the programme was not impartial, there was no opposite view given on this particular issue and it is after all a fact that its not a Bank’s concern whether a customer declares his income to the taxman – that can only be the customer’s affair.
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Like it or lump it, the finance industry is key in Jersey. Of course it should have priority over all others (do the math). You manual and states workers don’t seem to realise that without it, you too ARE OUT OF WORK! This is GOOD news people, I wonder if Panorama and the BBC (we hate Jersey) will do a program on that.
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51 Whatever, you completely ignore the fact that this employee of this bank was pushing the scheme as a way to deliberately circumvent the EU Savings Directive and that the scam had been engineered simply to do that!
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Nice one Terry, sham about the Lloyds TSB Channel Islands story.
More work to do.
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When you have only one industry on a small island we should be number one! Thats all the island has, finance, finance and more finance. Nice to see there doing so well, It would be even nicer if the Finance companies purchaced all there equiptment and supplies from jersey rather than them putting jobs up for tender, then giving the jobs to UK companies (furniture, Stationary, workers and other things. Think twice buy and supply local.
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