Jersey fares better on secrecy list
JERSEY has dropped two places to 18th on a ‘financial secrecy’ list of jurisdictions compiled by a pressure group that campaigns for fair taxation and transparency.
The Tax Justice Network gave Jersey a ‘secrecy score’ of 66 per cent in its latest Financial Secrecy Index, which was previously published in 2015 and assessed 112 jurisdictions on their financial transparency as well as their share of the global financial services market.
Despite its relatively high secrecy score Jersey was rated as a ‘small player’ in offshore finance, with a 0.1 per cent market share, giving it a final index score of 438.21 and placing it 18th in the rankings.
The final index score is calculated by cross-referencing the secrecy score with the market share rating for each jurisdiction.
Guernsey fared less well, moving up five places into tenth position on the list with an index score of 658.91. The UK was in 23rd place, scoring 423.76.
Switzerland topped the list with an index score of 1,589.57, while the USA was in second place with an index score of 1,298.47, which was largely due to its huge share of the global financial services market.
Jerseyman John Christensen, a director of the Tax Justice Network and a former States economic adviser, said that the ratings showed that it was not just small jurisdictions that fell short in terms of financial transparency.
‘What the Financial Secrecy Index has done, I think, is help the public understand that tax havenry is much, much more deeply embedded in the entire global economy,’ he said.
‘It isn’t just small players with palm trees – it includes some of the biggest and most powerful countries in the world.’
The secrecy score is compiled for each jurisdiction by calculating an average from 20 ratings based on criteria in areas such as corporate transparency, levels of financial regulation and compliance with international standards on anti-money-laundering measures.
Jersey scored well, averaging a rating of 11 per cent, in categories relating to compliance with international standards. The Island has in the last few years signed up to a number of treaties and standards, including the Common Reporting Standard, which requires tax information to be exchanged between countries, and the Base Erosion Profit Shifting initiative, which aims to stop multinational companies form artificially shifting profits to other jurisdictions.
Jersey fared less well in other areas, including the transparency of its legal entities, such as companies and trusts, where it received an average secrecy score of 90 per cent.
It also scored an average of 83 per cent on matters relating to financial regulation.