“Panama Papers” revelations being watched carefully by finance watchdog

Wednesday 06 April 2016

The unfolding revelations in the “Panama Papers” are being followed closely by the Jersey Financial Services Commission, who say that they won’t hesitate to investigate anything that suggests Jersey-registered companies have broken the law.

JFSC Director General John Harris says that although most of the stories flowing from the files since Sunday afternoon are about Panama and not Jersey, his team are following developments closely.

He has also confirmed that the Jersey office of Mossack Fonseca – the Panamanian law and trust firm at the heart of the Panama Papers – is not registered by the JFSC to carry out financial services work.

The firm has a small office in Old Street opposite the States’ Cyril Le Marquand House building. It used to be licensed by the JFSC, but at present it is not a licensed to carry out trust or any other regulated business.

Mr Harris said that the regulator was watching the unfolding developments closely – yesterday saw Icelandic Prime Minister Sigmundur Gunnlaugsson resign over revelations that he owned an offshore trust company with his wife. UK Prime Minister David Cameron also faced more questions about his late father’s use of a Bahama’s registered company to avoid paying UK tax on his wealth.

Mr Harris said: “If there is anything in respect of Jersey that requires us to look at it, we will look at it.

“If there are any specifics, we would look at it.

“We have no way of knowing if what is to come it going to be related to Jersey and we hope it does not, but we have to wait and see. Generally, there is not a huge amount about Jersey at this stage.

“The biggest issue, and we would acknowledge this freely, is the collateral damage that comes with being swept along with others.

“The supposition is that all standards in offshore financial services centres are the same – they are not, there is a range of standards and practices in what is colloquially called the offshore world.”

The OECD Secretary-General Angel Gurria put out a statement yesterday emphasising that steps had been taken in reforming the offshore financial services industry – he said that Panama was “the last major holdout” that was resisting reforms including registers of beneficial ownership and automatic exchange of information.

A report by independent financial regulation assessors Moneyval on Jersey’s financial regulation practices and procedures – which was undertaken in January last year – is due to be published in the next six weeks.