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29 October 2009

Michael Foot publishes final report

Michael Foot has today published his independent review of British offshore financial centres.

Michael Foot was asked by the Chancellor of the Exchequer to conduct a review of the long-term opportunities and challenges facing the British Crown Dependencies (CDs)  and Overseas Territories (OTs) as financial centres.

The report covers a number of important areas that impact on the future sustainability of these jurisdictions and sets out  a series of robust and sensible standards that Crown Dependencies and Overseas Territories will be expected to meet.

The report clearly states that British offshore financial centres must ensure they meet international standards on tax information exchange, financial regulation, anti-money laundering and countering the financing of terrorism, as well as ensuring, they put their public that finances on a firmer footing by diversifying their tax bases.

Financial Secretary to the Treasury, Stephen Timms said:

“I welcome Michael Foot’s report which comes amidst a real step change in the international determination to tackle tax and regulatory havens under the UK’s leadership of the G20.

This report sends a strong signal to overseas financial centres that they must ensure that they have the correct regulation and supervision in place, while also ensuring their tax bases are more diverse and sustainable to withstand economic shocks – this is essential to their long term stability”

Minister for the Overseas Territories, Chris Bryant said:

"I welcome Michael Foot's balanced and intelligent report. I have argued for some time that the Overseas Territories need to have robust governance of financial institutions, transparency in financial systems, proper regulation of off-shore financial services and a broader tax base.

The Overseas Territories have made substantial progress, especially in relation to financial transparency. I shall be working closely with the governments and governors to ensure that these recommendations are taken forward. There is still work to be done, but the Overseas Territories  play a unique - and uniquely British - role, which I want to protect. "

Lord Bach, Ministry of Justice Minister for the Crown Dependencies:

“I welcome the publication of this considered and helpful review. As it recognises, the Crown Dependencies have much to be proud of in terms of meeting high international standards.   

This is, however, a fast changing and increasingly complex financial environment. The report is clear that there is no room for complacency and we are confident that the Crown Dependencies will continue to lead the way in terms of meeting new standards as they evolve”

Notes for editors

1. The full report can be found on the Treasury’s website

2.  The full terms of reference were developed following consultation with the Governments of the Crown Dependencies and Overseas Territories and are available on the Treasury’s website

3. The PBR announcement of this review can be found at paragraphs 3.55 and 3.56 of the Pre Budget Report.

4.  Only those Crown Dependencies and Overseas Territories with significant financial sectors were included in the scope of the review. In scope are: Jersey, Guernsey, Isle of Man, Bermuda, Cayman Islands, Gibraltar, Turks and Caicos Islands, British Virgin Islands, Anguilla. Out of scope are: Falkland Islands, Montserrat, South Georgia and the South Sandwich Islands, British Antarctic Territory, British Indian Ocean Territory, Sovereign Base Areas of Akrotiri and Dhekelia, Pitcairn Island, Saint Helena.

5. UK Government is committed to working with international partners (including Crown Dependencies and Overseas Territories) in seeking global solutions to current economic circumstances. UK’s international engagement has been guided by The Prime Minister’s 5 principles of transparency, in relation to risks and balance sheets; integrity, and the absence of conflicts of interest in the system; responsibility of management for the risks they undertake; sound banking practices, with respect to risk and capital adequacy; and co-ordination across borders in recognition of global markets.

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