Business panel: CRS: good for Guernsey
WHAT is CRS and should I be worried about it?
David Larkin, director of trust & corporate services at Estera Guernsey, replies:
LOTS has been written about CRS recently, but the chances are that you don’t need to be worried about it if your tax affairs are up to date.
CRS stands for the Common Reporting Standard, which aims to prevent tax evasion by sharing people’s financial details between countries.
The CRS was developed by the Organisation for Economic Cooperation and Development in 2014, and was based on a similar initiative before that in the US, called the Foreign Account Tax Compliance Act or Fatca.
Fatca required all non-US banks to search their records for US customers and report the assets of those customers to the US government.
CRS is the new global version, with nearly 100 countries now signed up and information sharing having started last year.
Some believed Fatca and CRS would unearth large-scale tax evasion taking place in respectable financial centres such as Guernsey, but it turned out (as we knew it would) that Guernsey was not sheltering tax evaders. In fact, CRS has had a positive effect here, where we have long argued for better global standards. Now that so many jurisdictions have signed up to CRS, all countries are applying the same high standards that we have been when taking on new clients, and there is more of a level playing field.
Other initiatives, like the EU money laundering directives, are further forcing EU countries to strengthen their checks on new customers, so the scrutiny taking place when people put money in bank accounts outside their home countries has never been higher.
For those acting legally, there is nothing to worry about. These initiatives have created a lot of extra work – and cost – for financial services firms such as ours but Estera has never supported tax evasion, so for us it is business as usual.
