‘Surprise’ at Guernsey inclusion on EU ‘non-cooperative’ blacklist

Guernsey’s Chief Minister and Commerce and Employment Minister have expressed their astonishment that Guernsey has been included on a list of 30 so-called ‘non-cooperative’ non-EU jurisdictions, which was published today, reports Guernsey Finance.

The list consolidates national tax ‘blacklists’ as they stood six months ago, and includes any jurisdiction on 10 or more Member States’ lists. However Guernsey is only on nine, though is included because Sark – for which it has no legal responsibility in tax matters – appears on another ‘blacklist’.

Guernsey’s Chief Minister, Deputy Jonathan Le Tocq, said: “The Commission appears to have hurriedly put together a list of so-called ‘non-cooperative’ non-EU jurisdictions using some very arbitrary criteria. It is this type of arbitrary and inconsistent use of ‘blacklists’ that international standards are supposed to be replacing, so this seems to me to run counter to what the Commission itself is trying to do on tax transparency. It also runs counter to Commissioner Moscovici’s own positive views on Guernsey, which we discussed just over a month ago.

“I have written to Commissioner Moscovici today to express Guernsey’s disappointment and surprise that we are on this list, and to ask him to have Guernsey removed from it as soon as possible. The fact remains that we lead a number of EU Member States on tax transparency and cooperation, and we will be partners of the EU in the automatic exchange of information under the Common Reporting Standard. This means we are well ahead of the full EU 28 – and yet we have been erroneously placed on an arbitrarily defined blacklist. Our priority is to be removed from this list.”

Commerce & Employment Minister, Deputy Kevin Stewart, said: “This list is very odd indeed. We informed the Commission that we are on nine lists rather than 11, which was confirmed by the Latvian and Polish governments, but the Commission chose not to take that into account. Guernsey is on nine national blacklists, the same as other jurisdictions such as the Isle of Man and Gibraltar, yet we are erroneously included on the so-called non-cooperation list and they quite rightly are not. We will be seeking to be removed from this list as quickly as possible, and will work with the Commission as well as our partners in the EU Member States in order to do so.”

In including Guernsey on the list, the following factors in relation to Guernsey have been overlooked:
• Voluntarily adopting the EU Savings Directive and moving to automatic exchange of information from 2011. This means that information relating to accounts held in Guernsey by individuals resident in an EU Member State is now automatically sent to their home jurisdiction each year

• Voluntarily adhering to the principles of the Code of Conduct on Business Taxation, which has been formally endorsed by the Code Group

• Being part of the Early Adopter Group of the Common Reporting Standard on automatic exchange of information, after signing the Multilateral Competent Authority Agreement in October 2014. This means that we will be able to exchange information for 2016 in 2017, unlike a full EU Member state such as Austria

• Being assessed by the OECD’s Global Forum on Tax Transparency and Exchange of Information for Tax Purposes as largely compliant with the international standards on exchange of information on request – a rating that is shared with the UK, Germany and the USA

• Being a party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters

• At 1 May 2015, having 57 Tax Information Exchange Agreements in place (including 21 EU Member States and 16 G20 members) and 13 Double Taxation Agreements in place.

Public views from the UK Government, the European Tax Commissioner and also the Organisation for Economic Development and Cooperation (OECD) on Guernsey’s record on tax transparency and cooperation, include the following:

“I do not think it is fair any longer to refer to any of the overseas territories or Crown Dependencies as tax havens. They have taken action to make sure that they have fair and open tax systems. It is very important that our focus should now shift to those territories and countries that really are tax havens. The Crown dependencies and overseas territories, which matter so much –quite rightly – to the British people and Members have taken the necessary action and should get the backing for it.” – Prime Minister David Cameron, House of Commons, 9 September 2013

“Following the commitments made at the G8… the Crown Dependencies have taken significant steps forward on tax transparency putting them at the forefront of this agenda globally.” – Exchequer Secretary to the UK Treasury David Gauke MP, 3 July 2014

“I very much welcome the active engagement of the Channel Islands in the key initiatives involved in the fight against tax evasion, fraud and abusive tax avoidance in which they are important partners of the EU. Their commitment to the adoption of the Common Reporting Standard on automatic exchange of information, alongside the EU Member States, is particularly positive.” – European Tax Commissioner Moscovici, 5 May 2015

“Guernsey has been one of the most active jurisdictions promoting transparency in practice. Guernsey started negotiation of agreements prior to 2009, paving the way for many other jurisdictions. The number of TIEAs signed so far seriously enhances Guernsey’s reputation as a responsible and transparent financial centre, as recognised by the Global Forum peer review.” – Pascal Saint-Amans, the OECD’s Head of Global Tax Policy, November 2013