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25 May 2000

UK WELCOMES OFFSHORE CENTRES SURVEY REPORT

 

The report of the G7 Financial Stability Forum (FSF) on its survey of offshore financial centres marks a welcome start to the process of assessing regulatory practices and infrastructures in offshore centres, Economic Secretary Melanie Johnson said today.

Miss Johnson said;

?Ensuring effective supervision and cross-border cooperation is essential to tackling financial crime and delivering a more stable global financial services industry. The FSF report published today marks a significant step towards achieving these aims.

?The FSF proposed approach was pioneered with great success by the UK with the Edwards Review of regulatory arrangements in Jersey, Guernsey, and the Isle of Man. This review saw standards of regulation rise notably, and the reputation of the Crown Dependencies clearly benefited as a result.

?We now need to see similar progress elsewhere.  The FSF survey will help set  priorities for a programme of assessments which should raise standards of regulation and cooperation more widely.

?A wide range of differences exist within the three FSF groupings.  It is  clear that some jurisdictions are making greater efforts than others to meet the highest standards, and are encouraging others to follow.  They should be applauded for doing so.     

?Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Montserrat, and the Turks and Caicos Islands have already made a political commitment to satisfy international standards and good practice.  We recognise and welcome that.  Last year we agreed jointly with them in detail exactly what is required, and  together commissioned an in-depth review by independent regulatory experts to assess progress and make recommendations where appropriate.

?Implementation of any recommendations should see the Overseas Territories move to the top division.  I am pleased that they have led by example in this way, and I look forward to them making any changes needed to satisfy international standards and good practice.  I hope their example will pave the way for a successful FSF programme of assessments in other jurisdictions.?

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NOTES FOR EDITORS

 

  1. The Edwards Review into the Crown Dependencies was commissioned in early 1998 and reported in November 1998. The review and follow-up procedures saw the implementation of a large number of improvements across the board, dealing with financial regulation, cooperation in supervisory and criminal matters, resource levels, and anti-money laundering. The review was regarded as a success by all involved.
  2. Following the UK's White Paper ?Partnership for Progress and Prosperity - Britain and the Overseas Territories? in March 1999, the UK and the Overseas Territories Governments with significant financial services sectors agreed to jointly commission and finance an in-depth review by independent regulatory experts. KPMG were appointed in December 1999. They should report by July 2000, with their findings published soon afterwards.
  3. The UK Overseas Territories with significant financial services sectors comprise Anguilla; Bermuda; British Virgin Islands; Cayman Islands; Gibraltar; Montserrat; and the Turks and Caicos Islands.
  4. Gibraltar was not included in the KPMG review, as being a member of the EU they are subject to separate reviews relating to their ability to ?passport? financial services into other EU Member States. These reviews have found that Gibraltar matches UK standards of supervision in the fields of insurance and banking. A review of the investment services sector has not yet taken place.
  5. The UK approach of securing political commitments to satisfy international standards, assessing progress against those standards, and overseeing the implementation of recommendations is largely the same as that now proposed by the FSF.
  6. The FSF survey report was published with a view to prioritising which offshore financial centres should enter the assessment process. The UK experience should help ensure that the FSF programme is a success.
  7. Media enquiries on the UK role in tackling money laundering and improving financial regulation should be addressed to Charles Keseru at the UK Treasury press office on 020 7270 5188.
  8. Media enquires about the FSF report should be addressed to the FSF secretariat on 00 41 61 280 81 88.

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