- Guernsey was placed on European Union blacklist last week with 30 other jurisdictions
- It was warned that Jersey’s reputation could be harmed by proxy
- But Guernsey’s Treasury Minister said that the black list is not worth the paper it’s written on
- Should Jersey and Guernsey work more closely together? Take our poll below
THE European Union blacklist published last week that included Guernsey among 30 ‘non-co-operative’ jurisdictions has been denounced by an international standard-setter as little more than the opinions of EU member states.
The Organisation for Economic Co-operation and Development (OECD) has sent out a letter to its Global Forum members expressing concern that some of the jurisdictions on the EU blacklist are ‘fully or largely compliant’.
The letter states that the OECD is ‘ready to further clarify to the media the position of the affected jurisdictions with regard to their compliance with the Global Forum standards’.
Guernsey’s Treasury Minister, Gavin St Pier, said that the statement showed that the blacklist was ‘not worth the paper it is written on’.
The endorsement will come as some relief to members of Jersey’s financial services industry who were concerned that a smear on Guernsey’s international reputation would have a knock-on effect on pan-island firms and ongoing joint international negotiations. The matter was raised in Jersey’s States Assembly on Tuesday, when Chief Minister Ian Gorst reiterated that when both he and Guernsey Chief Minister Jonathan Le Tocq recently met the EU Commission, Guernsey’s compliance was not in question.
‘It is difficult for us to understand why such a list has been produced – it is not based on the standards set by the OECD Global Forum,’ Senator Gorst told Members.
The EU blacklist issued last Thursday named 30 jurisdictions which ten or more EU states had assessed as not meeting certain criteria. In Guernsey’s case, Poland had pointed the finger only at Sark, but because the smaller island is part of Guernsey’s Bailiwick, the European Commission said that it must be included – even though Guernsey has no responsibility for tax matters in Sark.
On Wednesday the Polish Embassy in London confirmed that it had informed the EU Commission that Guernsey was not included on the national Polish blacklist.
Guernsey’s Chief Minister also raised the issue at the British-Irish Council last weekend. Deputy Le Tocq said: ‘We are exploring every option of ensuring that Guernsey is removed from this list at the earliest possible time.’
Guernsey’s Chief Minister wants Guernsey to be removed from an EU blacklist to prevent or minimise any damage done to the island’s reputation.
This comes after the announcement that the island was blacklisted on the list of 30 ‘non-cooperative’ non-EU jurisdictions.
Deputy said that Guernsey meets every international standard on tax transparency and cooperation, acknowledged by bodies around the world, including the European Commission.
‘This is an arbitrary list which we have been shoe-horned into by way of a technicality.
‘Our objective is to be removed from the list as soon as possible, that way we can prevent or minimise any damage done.’
Deputy Le Tocq also recognised that it needed to explain its relationship with Sark more clearly to the European Commission.
While Guernsey in itself is listed by only nine countries it has been included as Sark, for which it has no legal responsibility in tax matters. Sark has appeared on Poland’s list.
‘The relationship between Guernsey and Sark is a complex one, so it is not surprising that international organisations don’t always understand it.
‘Clearly we need to explain it better to the European Commission. The Isle of Man and Gibraltar are also on nine lists, Jersey on eight.
‘It is clear that finance centres with low tax rates are likely to end up on these lists for technical reasons, but the onus is on us to demonstrate that we should not be on these lists.’
Tax expert Graham Parrott said this was very unfortunate news.
‘The report, to me, seems very cobbled together and it is a real shame that we have ended up on this list because of Sark.
‘It’s not the end of the world, but the negative publicity and reputational damage that goes along with such a publication is not great either.
‘Guernsey does everything it can to comply with EU laws – we are open, transparent and co-operative. This is evidenced by the changes made to corporate tax regimes.
