Crown Dependencies: Financial Regulation (Hansard, 20 January 1998)

§ The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn)

My right honourable friend has today invited the Home Office and the Island Authorities to carry out a review of the financial legislation and regulatory systems in Jersey, Guernsey and the Isle of Man. The purpose of this review is to assess the contribution made by the current laws and systems to the economic and social well-being of the Islands themselves, and the United Kingdom.

The review will be conducted by Mr. Andrew Edwards, formerly of Her Majesty's Treasury, who will work alongside the Constitutional Unit of the Home Office and the Island Authorities. It is expected to take about six months. Its terms of reference are:

Objective

To review with the Island Authorities their laws, systems and practices for:

(i) regulating banking, insurance and financial services business and collaborating with overseas regulators;
(ii) deterring, investigating and punishing financial crime, including money laundering and fiscal offences, particularly cases with an international dimension;
(iii) Registering companies;

with a view to assessing the contribution which they make to the economic and social well-being of the Islands themselves and of the United Kingdom.

Areas to be Covered

The review will cover the following main areas:

(i) Financial Regulation and International Regulatory Co-operation

Description and assessment of the current legal and institutional arrangements for licensing, supervising and regulating the full range of financial business, including banks, investment banks, other credit institutions, insurance companies, investment services companies, bureaux de change, international business companies and company registration agents and accountants and lawyers carrying on financial business (e.g., providing custody services or investment advice);

Examination of practical implementation of these activities and the resources devoted to them, in relation to the number and size of firms regulated and the nature of the business;

Arrangements for the regulatory authorities to share their own confidential information with overseas regulatory authorities, and vice versa;

Arrangements for the authorities to obtain other confidential information to assist overseas 236WA regulatory authorities with their investigations and vice versa.

(ii) Financial Crime

(a) Money Laundering

each Island's money laundering legislation;

the number of suspicious transactions reports received in each Island each year and how these are dealt with;

arrangements for collaboration between the Island Authorities and overseas authorities including the sharing of suspicious transactions reports;

(b) Criminal Investigations

collaboration between the Island Authorities and overseas authorities in investigating suspected financial crime (including fiscal offences);

the willingness or otherwise of the authorities to secure prosecutions;

collaboration between the Island Authorities and overseas authorities in tracing, freezing or confiscating assets held by suspected or convicted criminals based overseas.

(iii) Company registrations

each Island's legislation, systems and practices for registering companies.

Consultation and Comparisons

In undertaking these tasks:

(a) to have regard to other examples of offshore regulatory laws, systems and practices, such as Gibraltar and other United Kingdom dependencies;

(b) to consult Her Majesty's Treasury and others as necessary.