A Bishop speaking in the House of Lords has criticised what he described as Jersey's "low tax, weak legislation and easily exploitable loopholes" as he added to the international scrutiny of the island's financial services industry.
In a recent debate, Lord Bishop of St Albans, Alan Smith, cited “deeply entrenched tax inequalities” in the UK coming partly as a result of what he deemed to be tax avoidance facilitated by Jersey.
In his speech, he cited that, according to the 2019 corporate tax haven index, four of the top 10 'havens' globally were associated with the UK: the British Virgin Islands, Bermuda, the Cayman Islands, and Jersey.
Pictured: The Bishop of St Albans name-checked Jersey as he pushed the findings of the Church Action for Tax Justice and Fair Tax Now reports.
“The presence of tax havens, whether they be British Overseas Territories or Crown Dependencies combined with their close connection to the financial might of the City of London, facilitates an international network that syphons money out of nations and into these jurisdictions, with their low tax, weak legislation and easily exploitable loopholes," the Bishop said.
While he was “pleased” that the Crown Dependencies had agreed to publish public registers of beneficial ownership by 2023, he added that “the reality” was that London and “the UK’s associated territories will continue to be at the centre of a network for international tax avoidance.”
The criticism comes as Jersey finds its financial services sector under intense international scrutiny again, after the EU voted to tighten the criteria for its 'blacklist', which Jersey had previously been removed from.
Pictured: Jersey is expected to come under more intense scrutiny as the EU tightens up its blacklist of what it deems to be tax havens.
Speaking ahead of the EU vote, Tax Matters Subcommittee Chair Paul Tang shared similar sentiments to the Bishop.
“The list does not work yet,” he said. “And the nasty truth is that it’s not getting better; it’s getting worse. The Virgin Islands, Bermuda, Jersey. These are some of the world’s most renowned tax havens and they have been removed from the list," he said.
Following the vote, Tax Justice UK campaign group Director Robert Palmer suggested that Overseas Territories and Crown Dependencies had “lost their protector within the corridors of Brussels” due to Brexit and said that he expected the EU to “ramp up pressure on places like Jersey to clean up their act.”
Despite such criticism, Jersey's External Relations Department and Jersey Finance have always maintained that the island is not a tax haven, but a well-regulated jurisdiction.
External Relations Minister Senator Ian Gorst said last week: "Jersey has a track record of cooperation with the EU Code of Conduct group and we will continue to monitor any proposals for new global standards in financial services.”
Jersey Finance CEO Joe Moynihan commented: "Jersey already meets the highest international standards of governance and transparency in financial services. We have co-operated closely with EU governments over many years, especially through its EU Code of Conduct Group, which has already assessed Jersey’s tax regime and found it to be compliant.
"Long-term dialogue with Member States has led to greater understanding of our finance industry and resulted in our own bilateral agreements and arrangements with the EU, which in turn provides Jersey with market access.
"The industry will continue to work with government and the regulator in helping to ensure that both our robust regulatory regime and our commitment to tax transparency and co-operation with tax authorities, such as those in the EU, are recognised by all key European bodies."
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