ST HELIER, Jersey (Reuters) - Jersey is well-placed to weather a political clampdown on off-shore financial centres due to its exchange of information with other countries, the island’s chief minister said.
“As long as it’s done on an objective basis then we can hold our head up high,” Terry Le Sueur, Chief Minister of the States of Jersey, told Reuters in an interview.
Jersey, which has already signed several agreements with other nations, including Germany, will soon add more and is confident it will be seen as a cooperative tax haven due to the progress it has made in recent years.
Politicians around the world have vowed to crack down on tax havens following the financial crisis and a number of scandals in recent months.
“The pressure’s going to come on those reluctant to disclose and those trying to maintain secrecy,” Le Sueur said.
Separately, the Jersey director for international finance said an international drive for greater transparency in off-shore finance centres is at a turning point after Swiss bank UBS UBSN.VX(UBS.N) agreed to release confidential client data after pressure from the United States.
“The debate has moved on from off-shore jurisdictions to uncooperative jurisdictions,” Martin De Forest-Brown, States of Jersey Director of International Finance, told Reuters.
“If you go back six months ... nobody would have mentioned Belgium or Switzerland,” he said.
Last month, UBS agreed to provide information on 300 clients to the U.S. authorities and agreed to pay a $780 million (552.9 million pound) fine for its part in helping American clients evade tax.
The G20 group of richest nations plus a range of emerging economies is expected to draw up a list of uncooperative off-shore finance centres soon, along with a guide as to how they can be brought into line.
“There are a limited number of off-shore centres that have signed any significant number of tax information exchange agreements,” Le Sueur said.
“So the pack is automatically splitting between those who are demonstrating willingness to sign and those who are reluctant to sign.”
Jersey has agreed to the automatic exchange of information with other countries in principle, Le Sueur said, though it has not implemented the measures yet.
A hasty introduction would mean risking losing business to jurisdictions such as Switzerland and Austria, which maintain strict banking secrecy laws, he said.
Jersey’s financial services industry, which offers a tax-friendly climate for the deposits and assets of multi-nationals, corporations and investment funds, accounts for well over half of the island’s economy.
De Forest-Brown said it is unlikely the G20 will go as far as to name uncooperative jurisdictions.
Large European off-shore centres such as Austria and Switzerland, which still have banking secrecy laws, are likely to come under increasing pressure, he said.
“They need to get their house in order, the large nations, so can apply the rules to all the smaller jurisdictions,” he said. “That’s what we want because we want to compete on a level playing field.”
Editing by Andrew Macdonald