Guernsey under attack

SO THE attacks just keep coming. They may be ill-informed, sometimes just plain wrong, but there is no doubting Guernsey is making the headlines for the wrong reasons at the moment.

And with the current economic downturn, the spotlight is only going to get brighter on financial centres seen by critics to be sucking money out of other countries.

One of the problems with the attack dogs in Europe and America is that they are often from outside the mainstream, the back benchers, not the people targeted when government spreads the word about Guernsey being a well regulated and transparent jurisdiction.

If we look across the Atlantic, Democratic senator Carl Levin was again on the offensive last week on regulating offshore jurisdictions.

He has a bill at committee stage that might never see the light of day on the issue, but if weight was needed, it is co-sponsored by the man favoured to be America's next president, Barack Obama, so it might just be time to take note.

Indeed, if you look at the Obama/Biden campaign pledges, the issue is part of their fiscal plan. Right under the heading, Make the Tax System Fair and Efficient, is the End Tax Haven Abuse Section: 'Building on his bipartisan work in the Senate, Obama will give the Treasury Department the tools it needs to stop the abuse of tax shelters and offshore tax havens and help close the $350 billion tax gap between taxes owed and taxes paid.'

If you need to get your message across to one person, the president of America is probably it.

The Obama press office was approached for comment, but must have a few other things on its plate at the moment.

Back to Senator Levin.

He said that as global leaders meet to strengthen international financial regulation, it is urgent that they address what he called the secretive and largely unregulated world of offshore jurisdictions.

'By offering financial services built around secrecy, minimal taxation, and hands-off regulation, the offshore jurisdictions promote tax evasion and undermine transparency, government oversight and the rule of law,' claimed Senator Levin.

'Offshore jurisdictions routinely unleash anonymous corporations, hedge funds, trusts and other financial entities on the world and hinder international efforts to detect, stop and punish misconduct. Inaction by the international community has encouraged an alphabet of countries to engage in offshore abuses, from Austria to the Cayman Islands, the Isle of Man, Liechtenstein, Monaco, Singapore, Switzerland and more.'

He may not have named Guernsey directly, but a spokesman confirmed it was one of the jurisdictions being targeted by the comments.

'It is long overdue for the world community to take a collective stance against the offshore jurisdictions' secretive, unregulated way of doing business. The nations of the world must adopt mechanisms to bar uncooperative offshore financial institutions from accessing international financial systems. We can fight back and I hope the United States will take a leadership role in the overdue effort to combat offshore abuses.'

His comments came before similar attacks as the OECD met in Paris.

GuernseyFinance chief executive Peter Niven said there was nothing new in what Senator Levin was saying.

'I think he will find if he looks at what we're doing, we're far more regulated than a lot of the States in the US, particularly Delaware.'

What we might see is countries looking closer to home first. In the case of America, this could be the Cayman Islands.

But to Mr Niven it is all sounding familiar.

'The rhetoric being used here is certainly not new. This is a repackaging of what has been said by Senator Levin and others for many years, despite the numerous visits politicians and civil servants made to the US to get a message across, and they have a very good rapport with officials there. But there are still people like Levin banging on about secrecy, non-cooperation and lack of regulation.'

He said that rumblings from Germany and France were also not new.

'France has always been very negative, especially as far as the Channel Islands are concerned, but closer to home they have Monaco on their doorstep, which is still on the OECD's black list. They, again, might need to get their own house in order.'

So is Guernsey doing enough to dampen these flames?

'We do have dialogue with all these jurisdictions at varying levels and with the European Union through the UK Government as well as our own discussions. We're constantly getting a message across about how well regulated we are and we will continue to do that.'

So it seems that it will be a constant firefighting battle and just now those fires are getting more and more intense.

Guernsey just has to hope it continues to have friends in the right places.