Beneficial ownership move is “misguided and wrong” – Guernsey Finance chairman

02 March 2019

Guernsey and its fellow Crown Dependencies are part of the solution to harmful tax practices, not the problem, says the Chairman of Guernsey Finance.

Lyndon Trott, a former Chief Minister of Guernsey and currently the island’s Deputy Chief Minister, has an extensive background of talks with fellow politicians at the highest level in Whitehall, Westminster, Brussels and the United States, and as Chief Minister in 2008 co-signed with the UK Minister an agreement which clarified the relationship between Guernsey and the UK.

As Chairman of Guernsey Finance he responded to the news that amendments that are being proposed to a UK Parliamentary Bill this week in an attempt to impose public registers of beneficial ownership for the three Crown Dependencies.

Guernsey has been a global financial services centre for more than 50 years, providing specialist solutions to sophisticated clients and facilitating international capital flows and trade.

Its stable, secure, self-governing status means it is constitutionally autonomous from the UK, and that the UK Parliament cannot legislate for Guernsey.

“This political move by a small number of MPs is misguided and wrong. Some members of the House of Commons still do not understand that Guernsey and the other Crown Dependencies are part of the solution to harmful tax practices, not the problem, and one can only assume that they have not looked at the evidence,” Mr Trott said.

“This political move by a small number of MPs is misguided and wrong. Some members of the House of Commons still do not understand that Guernsey and the other Crown Dependencies are part of the solution to harmful tax practices, not the problem, and one can only assume that they have not looked at the evidence."
Deputy Lyndon Trott, Chairman, Guernsey Finance 

“Public scrutiny of beneficial ownership registers is irrelevant to their effectiveness, and undermines the normal standards of privacy of personal affairs in a way that is as unreasonable as it is ineffective. What is important is that registers are maintained and the data verified in real time, and that the data is available to appropriate tax, law enforcement, and security authorities in a timely manner. 

“Guernsey’s register meets all of these criteria to standards in excess of the UK’s register and clearly complies with accepted international standards.”

The island’s track record on beneficial ownership registers, with details available to the tax authorities or police on request, has been backed by supranational regulatory authorities and meets all international standards on fighting financial crime. The island authorities say the quality of information held is materially superior to that held on the UK’s register.

Mr Trott continued: “The Guernsey community is part of the British family. We share a history, culture and values, which includes a strong belief that people should be open with their tax authorities and pay the full amount of tax for which they are liable.

“We do not encourage or tolerate the evasion or aggressive avoidance of tax by private individuals or corporations that choose to do business here, and we are an active partner of the OECD’s anti-BEPS initiative.

“We have led the way in regulating the trust and fiduciary industry, were in the first wave of countries implementing US FATCA and the Common Reporting Standard. There can be no doubt about the effectiveness of the steps we have taken to eliminate harmful tax practices in Guernsey.

“As a proud and close partner of the City of London and the UK’s financial services sector, we are frustrated that this record is not properly recognised or respected by those behind these proposed amendments.”

Mr Trott also indicated that the issue has real potential to significantly damage the relationship between Guernsey and the UK. “On 18 December 2008 I signed, as Guernsey’s Chief Minister, the Framework for Developing the International identity of Guernsey with then Parliamentary Under-Secretary of State to the Department for Justice, Lord Bach. This laid out clearly the basis on which the UK and Guernsey would work together on international matters. It stipulates the relationship is one of support not interference and commits both parties to open, effective and meaningful dialogue with each other on any issue that may come to affect the constitutional relationship, and to working together to resolve any differences which may arise between our respective interests.

“It is clear to me that for the UK to unilaterally tear up such an agreement would substantially damage our confidence in the UK Government, and seriously undermine our long-standing and close relationship with the UK and the Crown.”

"It is clear to me that for the UK to unilaterally tear up such an agreement would substantially damage our confidence in the UK Government, and seriously undermine our long-standing and close relationship with the UK and the Crown.”
Deputy Lyndon Trott, Chairman, Guernsey Finance 
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