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Jersey funnelling global ‘dirty money’, claims MP

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‘DIRTY money’ from around the world is being funnelled through Jersey to avoid public scrutiny, according to a senior British politician campaigning to improve transparency.

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Dame Margaret Hodge MP has launched a stinging attack on the Island’s government and finance industry for failing to make its beneficial ownership register public.

Jersey, like other Crown Dependencies, has a register which can be accessed by other governments and law enforcement authorities if they suspect wrongdoing, but it isn’t open to all.

Speaking to the JEP from her office in the Houses of Parliament, Dame Margaret said: ‘I have no doubt that a lot of dirty money is being driven through Jersey. You only have to look at the Panama Papers and the Paradise Papers to see how important jurisdictions like Jersey are. There’s nothing to stop Jersey having whatever tax rates they want. All we’re trying to bring to an end is the secrecy.’

In response, Mike Byrne of the Jersey Funds Association dismissed her criticism.

He said: ‘There’s no evidence of the dirty money which Margaret Hodge refers to. We’re fully in line with international standards, including Moneyval and the OECD. We just don’t believe the comments made by Margaret Hodge ring true. I think that it’s unhelpful to criticise our industry without fully understanding it and understanding the very strong regulatory regime that applies. She should understand this before making such broad-based allegations.’

Earlier this year the Labour MP, together with Conservative MP Andrew Mitchell, was successful in winning a parliamentary debate which forced Overseas Territories to make their registers public, but her attempt to extend that to the Crown Dependencies failed.

The pair have since met politicians and finance industry representatives in Guernsey and the Isle of Man. A similar meeting in Jersey will take place in December.

Her intervention comes at a sensitive time for Jersey’s authorities. This newspaper previously exclusively revealed the Russian billionaire businessman Roman Abramovich had been given residential status in Jersey. Since then, it has emerged he was refused Swiss residency after the police determined he posed a ‘threat to public security’.

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The comments from Dame Margaret heap fresh pressure on Jersey’s government to reassure critics that checks and balances are in place for so-called ‘politically exposed’ individuals wanting to use Jersey as a location to either live or manage their wealth.

Dame Margaret added: ‘You cannot allow trillions to find its way around the world in a dirty way. We can’t tolerate that and most Jersey residents will understand that. I think the financial services sector has got to learn to do bona fide business that’s above board and doesn’t entail financial structures that have no other purpose than avoiding tax or hiding dirty money.’

Responding to Dame Margaret’s interview with the JEP, the States of Jersey said in a statement: ‘Jersey’s government has consistently said that it will consider introducing a public register of beneficial ownership if it becomes the agreed global standard, in line with our early adoption of other international standards. That decision is for the States Assembly to make.

‘We welcome visits from UK Parliamentarians like Dame Margaret Hodge. These visits provide an opportunity to demonstrate Jersey’s leading approach to financial regulation, including the retention, verification and sharing of beneficial ownership information with law enforcement and tax authorities. We hope that Dame Hodge would share with such authorities any evidence of illegal funds being processed in Jersey, or anywhere else.’

Read the full interview with Dame Margaret Hodge in Friday's JEP.

Gary Burgess

By Gary Burgess
Reporter

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