Steve Williams, who was speaking at a finance industry conference, said the blacklist of ‘non-cooperative jurisdictions’, together with new requirements to register beneficial ownership of trusts, were current EU policy developments of particular importance to the islands.
In terms of the blacklist, Mr Williams explained that Jersey and Guernsey were among the 92 jurisdictions currently being screened by panels of experts established by the EU Code of Conduct Group on business taxation.
Although Jersey was expected to fulfil most of the requirements, the assessment of ‘real economic activity’ was ‘potentially more problematic’ and open to interpretation. ‘That is not helped by the fact that currently there is no international standard on these matters, particularly in relation to investment holding companies,’ he said.
The final recommendations will be put before the EU Finance Ministers on 5 December.
Over recent months specialists locally have voiced concerns that, for example, companies providing investment advice to non-Jersey beneficial owners about non-Jersey assets could fall short of the EU requirements. Similarly, board directorships for Jersey-registered companies with their main business outside the Island could fail to satisfy the ‘real economic activity’ test.
Before joining the Brussels office in 2011, Mr Williams worked for 30 years in the British Diplomatic Service. He was invited to speak at the STEP Jersey 25th anniversary conference at the Pomme d’Or Hotel, which attracted over 200 delegates. He said: ‘Guernsey and Jersey, and our office, have left no stone unturned either in the quality of material that has been submitted to the Code of Conduct Group as part of the screening, or in our underpinning diplomatic engagement in Brussels and with national governments to ensure our messages are understood.
‘Indeed, only this week the Chief Minister, Ian Gorst, and the Deputy Chief Minister of Guernsey, Lyndon Trott, were in Brussels to reiterate those messages.’
However, the Brexit process was ‘a huge challenge’ for both the Channel Islands, he said.
‘The outcome matters enormously. It impacts on just about every facet of our economies and our communities – fishing, farming, transport links, data flows, telecommunications, labour supply, tourism, the environment, law enforcement, judicial separation, financial services, tax and more.’
The governments in both Jersey and Guernsey have ‘risen admirably’ to the challenge, he added.
‘Since the referendum, the islands have established good consultative mechanisms with the UK government at both political and official level to ensure our interests are properly understood and taken into account in the UK negotiating positions, and to ensure that we are kept fully abreast of the progress in the negotiations,’ he said.
‘The UK has explicitly confirmed that it is committed to doing this, most recently during the visit by Brexit Minister Robin Walker. This is very welcome.
‘But there is no getting away from the fact that major uncertainties lie ahead. Brexit is uncharted waters for all concerned – the EU, the UK, the Channel Islands and the rest of the world.
‘We need to remain flexible and nimble – traditional Jersey and Guernsey strengths – because the pace of negotiations is inevitably going to to pick up. And we must remain clear-headed about our own objectives.’
