CRS questions on the minds of Chinese clients and corporates

05 December 2016

There are signs of a growing urgency in mainland China to better understand the implications of next year’s introduction of the Common Reporting Standard (CRS).

Institutions from within China’s trust and banking sectors, as well as private clients, are increasingly seeking guidance from jurisdictions which were early adopters of the OECD regime. That appetite for knowledge was recently demonstrated in Shanghai where Guernsey Finance, in conjunction with the Griffin Plutus Family Office, attracted almost 200 senior Chinese banking, trust, securities and insurance practitioners to an initial briefing on CRS.

Some of the key issues practitioners are looking to address ahead of the moves towards global transparency relate specifically to concerns around data protection and correct reporting procedures.

China CRS

Kate Clouston, Director of International Business Development for Guernsey Finance, said Guernsey’s long-standing experience in meeting global international standards and requirements meant it is perfectly placed to share its expertise.

“Guernsey has been adapting its regulatory requirements around the CRS since it signed on in October 2014. Given its long-standing experience in meeting global international standards, our finance sector has successfully navigated some of the uncertainties and questions now being confronted by China and is in a good position to share its expertise with other jurisdictions,” said Miss Clouston.

Discussions have now begun between the two financial hubs around opportunities for Guernsey to export its compliance expertise to China through an educational agreement to bring practical training courses, focussed on CRS and other reporting processes, to Shanghai in the first instance.

“CRS highlights that offshore wealth management is not just about accounts opening, money transferring and insurance policy purchasing, it is a deliberate choice of a suitable offshore financial centre. Due to its well-regulated economic environment and the well-trained professional practitioners, more and more Chinese clients are awakening to the Guernsey option,” said Antoine Kuo, a speaker and the founder of Griffin Plutus Family Office.

"Due to its well-regulated economic environment and the well-trained professional practitioners, more and more Chinese clients are awakening to the Guernsey option.” Antoine Kuo of Griffin Plutus Family Office

Other speakers at the first Guernsey CRS briefing included Ni Yongjun, Partner of Zhonglun Law Firm; Zhang Qiang, Chief Investment Officer of CubeTech Global Asset Limited; Li Yun, Senior Tax Manager of Deloitte and Ding Peiqing, Tax Director of Deloitte.

CRS requirements are also a trending finance topic in Hong Kong where Dr Andy Sloan (seated centre in the picture below), Director of Financial Stability at the Guernsey Financial Services Commission, has been a key figure in AVCJ panel discussions around backroom compliance.

“Going forward CRS will be the new AML. Clients will need to ensure their affairs are structured in jurisdictions which most importantly provide comfort to the banking sector that compliance risks are minimised. Guernsey was in on the ground floor designing the framework for reporting on trusts with the US on FACTA that then laid the groundwork for CRS trust reporting. The island has taken a leadership role in this respect,” he said.

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