Appendix 3
Main recommendations of the Final Report of the
Independent Review of British Offshore Financial Centres
The Review recognises that the following recommendations
will require more substantial action in some jurisdictions than
in others.[116]
1. The UK should discuss and consider governance
arrangements with the jurisdictions to ensure that there is a
shared understanding of respective responsibilities and expectations.
2. The quality and extent of financial planning in
the jurisdictions should be aligned with that in the best performers
(the Crown Dependencies). In particular, jurisdictions should
implement a prudent approach to managing government finances by
developing: a diversified tax base to maximise sources of revenue;
mechanisms to measure and control public spending; and by building
financial reserves during periods of economic growth.
3. The UK should be proactive in satisfying itself
that the Overseas Territories in particular have frameworks capable
of identifying and responding to external shocks and encouraging
local governments to undertake responsible adjustment programmes
where these are necessary.
4. To meet international standards, jurisdictions
which have not already done so should:
- meet the international standard on tax transparency
set by the OECD and continue, even after meeting the current minimum
of 12 [tax information exchange agreements], to negotiate further
TIEAs, giving priority to those jurisdictions with which they
have significant financial links;
- set up the administrative procedures necessary
to ensure full delivery of the OECD standard, to a level of compliance
that will satisfy the peer review process that is being put in
place;
- make an early commitment, with a timetable for
implementation, to automatic exchange of tax information under
the EU Savings Directive;
- ensure that the regulatory authorities have the
necessary resources and expertise to implement and enforce international
financial sector regulatory standards;
- move to amend laws and procedures as necessary
to achieve compliance with the [Financial Action Task Force's]
16 'key and core' Recommendations.
5. At an international level, the UK should press
for improvements in 'know your customer' minimum standards and
promote moves towards improved transparency of beneficial ownership
of companies and trusts and the monitoring of politically exposed
persons.
6. All jurisdictions should ensure that:
- governance arrangements in their regulatory authorities
are sufficient to maintain the integrity and independence of all
decisions taken;
- responsibility for promotion of the financial
centre is separated from the regulator in both letter and spirit.
7. Those jurisdictions that offer (or propose to
offer) protection to retail depositors must ensure that compensation
schemes can be understood by those depositors.
8. Jurisdictions that lack an Ombudsman scheme should
consider whether one is justified.
9. Any jurisdiction that has not already done so
should undertake a thorough examination of the range of powers
to resolve a crisis in its financial services sector.
10. Local governments should require the regulator
to maintain close oversight of any large locally incorporated
financial institutions, the failure of which might lead to requests
for financial help from the UK. This should be backed by the option
of a periodic independent and external review, paid for by the
institution itself, commissioned by the local authorities on their
own initiative or at the request of the UK.
11. The UK should discuss with those jurisdictions
in need of technical assistance to fight financial crime how that
assistance might be delivered and the benefits of assistance secured
in the longer-term.
116 Foot, M., (2009) Final report of the independent
Review of British offshore financial centres, para 1.6. Available
at http://www.hm-treasury.gov.uk/indreview_brit_offshore_fin_centres.htm. Back
| 
