Memorandum submitted by A.T.T.A.C France
and from Local A.T.T.A.C Saint-Malo Committee
PRESENTED BY:
(c/o Attac France) The Members of the Committee
of Attac Pays de Saint-Malo (Association for the Taxation of financial
Transactions for the Benefit of the People—In English. Association
Loi de 1901 ) (Attac Jersey with whom we are linked have
sent their own Submission.)
1. We are very pleased to know that some Honorable
Members of the UK Parliament have expressed the wish to better
identify the nature and the development of the relationship between
the UK Government and the Crown Dependency of Jersey. This question
has also concerned us as neighbours, colleagues and dearest friends
of a community that probably deserves much better than being disliked
and stigmatized increasingly over the last few years in the rest
of the world, notably in our European region, for the role the
Finance Industry and the local Establishment have gradually played
in transforming this island into what global media call a "tax
haven", with a poor record in terms of real contribution
to the world economy. We also have been witnesses of the degradation
of the living conditions this recent evolution has had on thousands
of its inhabitants, on the dramatic changes it has also had on
some of its formerly prosperous activities like tourism and agriculture.
2. We had the opportunity to discuss some of
these issues as early as 2001 with Senior Foreign Affairs
Minister C Josselin at the Quai d'Orsay (French Foreign Affairs
Ministry), in the company of Me G Halimi, a French Lawyer, MEP
at the time. We have since that meeting tried to inform a variety
of national and international political figures on many aspects
and notably what is experienced and seen abroad as obvious citizen
discrimination ie the de facto segregation of Jersey-born
citizens.
3. We also had the privilege of being present
in the Houses of Parliament in London when some MP's accepted
to hear Tax Justice Network's message as it announced its creation.
That is why we are very thankful to all those who are prepared
to explore these issues and hopefully remedy some of the ills
that affect many members of this Jersey Community.
4. We have been particularly sensitive to
the words used by Lord William Wallace in the Jersey Evening Post
(26 August 2009) and we hope for all Jersey people and their
future that these words will not be the end of it all:
"Jersey and Guernsey are dependencies of
the British Crown. The British Government represents the Crown.
The British Parliament, within a constitutional system which is
based on parliamentary sovereignty, holds the government—and
through it the Crown—to account. Both Houses of Parliament
have neglected this duty, so far as the Crown Dependencies are
concerned, for many years. The Justice Committee of the House
of Commons is now remedying this neglect by launching an enquiry
into how well the British Government manages the relationship
with the Crown Dependencies."
5. Who we are and what we stand for:
A.T.TA.C, now present in over 40 countries
in the world, was founded in 1998 by B Cassen and I Ramonet,
two French academics and editors of the well-known monthly magazine
Le Monde Diplomatique, published in 43 countries.
The acronym stands for Association pour une Taxation sur les
Transactions Financières et l'Aide aux Citoyens (Association
for a Tax on Financial Transactions and Assistance to Citizens).
6. Its main raison d' tre was to
raise awareness of the vulnerability of Western economies and
currencies resulting from excessive financial speculation as illustrated
by the overnight devaluation of the Pound, for instance, resulting
from attacks by major funds like that of G Soros, a speculator
now turned philanthropist, who has lately recognized how fragile
the current economic and financial system was, notably as a result
of the massive deregulation process initiated by Prime Minister
Thatcher in GB and President R Reagan in the USA. It has taken
thousands of job-losses, hundreds of millions of pounds, and the
recent crisis for many to realise the systemic risks associated
with the "creativity" of the period that unleashed all
sorts of more or less sophisticated financial techniques of opacity,
in particular. These were found later to have been at the heart
of scandals, "symptoms of the disease", some say, like
LMTC, Enron, Parmalat, Credit Lyonnais, etc… It is now well
known that in all these cases "tax havens" or "low-tax
jurisdictions" were used to conceal profits or losses, for
instance, and deprive the honest investor or share-holder of the
information they need to make decisions in all fairness.
7. As early as 1972, U.S Nobel Prize winner
James Tobin warned that the logic at work in the drift of unleashed
finance away from the "real economy" would lead to serious
crises if no specific framework was drafted. He suggested a very
simple tool that consisted in taxing—at a very low rate—every
dollar or pound that got across a national border in order to
limit speculation for the sake of speculation (without any social
or economic real profit) and ensure the traceability of funds,
just like the traceability of meat or eggs, for instance, can
be guaranteed to the European consumer… Such a tax, of course,
would not be applied to exchanges of funds in relation to commodities
or services).
8. Just a few days ago, following many other
economists or politicians, German Minister for Finance P Steinbruck
and German Foreign Minister F Stenmeier declared in the Süddeutsche
Zeitung that they were strongly in favour of such a tax. They
proposed a tax rate of 0.05%. They even suggested an international
financial transaction tax, levied not only on currency transactions,
like the Tobin Tax, but on all kinds of financial transactions,
including equity, certificates and derivatives. Steinbrück
also said, he would bring the issue on the agenda of the Pittsburgh
G20 summit.The initiative comes two weeks after the head
of the British supervisory authority Lord Turner had proposed
to introduce a currency transaction tax. He added that "ordinary
people are right to have a suspicion" and that "in many
cases the banking industry was socially useless".... This,
one can guess, could impact financial places like the Crown Possessions
and Dependencies.
9. Why we believe our submission may be
useful:
What we have tried to indicate in the previous
lines clearly means that our intention is not to give lessons,
of course, to anyone but to put our present submission in context
and in the light of our long advocacy, along with other citizens'
groups (like Oxfam, Tax Justice Network, Friends of the Earth,
Caritas, Catholic CCFD, etc) in favour of more responsibility
and a stronger sense of justice in International politics.
10. We, members of Attac Saint-Malo (linked
with Attac Jersey) in particular, like Jersey very much and have
given ample evidence of our concern for Jersey people and their
community. Some of us have been regular visitors since our childhood
and have got personal connections with the Channel Islands. Saint-Malo,
Granville, Avranches and many other French towns in the region
are twinned with Parishes in Jersey and see Saint-Helier or Saint-Peter
as neighbours and, even if a linguistic or a political barrier
has been created relatively recently, this has not changed much
in terms of our interest and care for these wonderful "flower
gardens" Victor Hugo loved so much. On the occasion of our
public meetings in France and in the region of Saint-Malo, in
particular, it is a surprise for many people to discover that
Jersey is neither part of the United Kingdom nor European.
11. We are united with these "ordinary
people" mentioned above by Lord Turner and our local Attac
Committeee in Saint-Malo, in particular, has been in contact with
Jersey people for many years. What follows results from observations,
contacts, interviews, studies, developed within our association
and also from close links with Jersey people some of whom literally
took very serious risks to raise questions and suggest alternative
scenarios for the future of their Island community.
12. We believe that it is the duty of responsible
politicians and policy makers to address the problems that are
so specific to these Crown Possessions and Dependencies, most
of which have remained hidden for years for particular reasons,
often in connection with the hypertrophy of the financial sector
that has perhaps used and abused the institutional idiosyncrasies
of Jersey, for instance, to get a global capabilty and a legitimacy
it would never have obtained in other, less exceptional, circumstances.
To many international observers, the fact Jersey has been recently
moved to the OECD "white list" of tax havens does not
mean its nuisance capacity has been diminished and the situation
of its inhabitants improved as a result. On the contrary international
public opinion would not accept things to remain in their present
state.
13. The recent cases of the Turks and Caicos,
or the Cayman Islands, even suggest having to act in an emergency
for any responsible government these days has a more serious cost
eventually in comparison with a regular monitoring process from
the government which has the ultimate responsibility for such
places.
14. Recently, the British government refused
a bail-out to Grand Cayman, the world's biggest hedge-fund venue
and fifth biggest bank centre as its government headed for bankruptcy.
Despite a population of only 52,000 inhabitants, its GDP
officially places it as the world's 12th richest jurisdiction
and it was, following promises of improvement, placed on a "grey
list" of harmful tax jurisdictions by the OECD very recently,
the very grey list Jersey was part of until recent upgrading.
15. The case of the Turks and Caicos Islands
also highlights the risks of letting a jurisdiction "go it
alone". These islands also made commitments with OECD countries
to improve the transparency of their tax systems in 2002. On 14 August
2009, British Authorities announced the suspension of the local
government and took day-to-day control of the Island Group though
direct rule to restore good governance and sound management in
the territory as these islands were striving to become a leading
offshore financial centre with ... over 16,000 companies
registered for 32,000 inhabitants ... Just before all this
came to light, M Williams, the Chief Minister, the archipelago's
P.M, had pleaded for a free-association with ... Canada and expressed
his wish his Islands might become Canada's 11th "Province",
no less. Besides, it is interesting to know Canada's PM, Paul
Martin is said to have invited M Williams.
16. The difficulty Prime Minister Gordon
Brown recently had in the face of the Granite fund/Northern Rock
scandal in Jersey, a symptom of the degradation of the Finance
Industry, we believe, may tend to substantiate causes for comparable
fears ... Noone would like to see Jersey people experience the
same plight as their Cayman or Turks and Caicos cousins.
17. Human Rights, Justice, and political
structures: Some strange facts:
The following remarks are mostly observations
from outsiders and, we admit, do not result from specific Human
Rights expertise. As such however, they probably are emblematic
of many questions raised over the last few years by observers
and friends of Jersey.
18. The Child Abuse Question has been haunting
all those who have tried to understand how such practices may
have taken place for so long and traumatised so many vulnerable
children in Jersey, which cover-ups and dissimulation have been
possibly put in place to by-pass traditionally accepted checks
and balances in what claims to be a democracy. No community is
immune from such abuse, to be sure, but it seems that a specific
local culture of secrecy and a lack of oversight by the Powers-Above,
that can be found in other areas of public life, some suggest,
has favoured impunity for years for some of the abusers and those
who made such abuses possible.
19. Have all the conclusions been drawn
in terms of thorough political responsibility from these facts
in terms of good enforcement of the Rule of Law as Her Majesty's
subjects might expect? Again, no country or community can claim
any superiority in these matters but the standards that Great
Britain has amply contributed to create as universal also create
a duty to those who today are the standard bearers of these values,
notably in the western world.
20. Also in other fields, it is well known
that the Jersey authorities have in many cases accepted some of
the ECHR (European Convention on Human Rights) requirements only
after years of opposition and, sometimes, after a clear ultimatum
was presented by London. Homosexuality, for instance, remained
criminalised until the late 80's, we believe, in contradiction
to the commitments resulting from the UK's signature to the ECHR
and this also applies to other fields (See: Memorandum from M
Dun, Jersey/House of Commons Select Committee on Foreign Affairs
2002) http//publications.parliament.uk/pa/cm200203/cmselect/cmfaf
21. It is sometimes ignored that Jersey
is a signatory to the ECHR, through the UK. It seems that the
States of Jersey sometimes would like to benefit from the advantages
of being members of the global village wihout accepting some of
their obligations, but we also know that this point is challenged
by many Jersey people as well. Whether their voice can be heard
is not certain.
22. Incidentally, the political structure
of Jersey sometimes looks enigmatic to us in France, notably what
would appear in other places like an obvious conflict of interest.
How come, for instance, the Island's Chief Judge
(the Bailiff) may simultaneously be the Speaker of the Parliament,
called "the States" in Jersey? Many other confusions
can be noted, it seems, and the politicization of many constitutional
roles inevitably raises questions in terms of vested interests
and ideological orientation in areas where general interest tend
to systematically coincide with the narrower interests of private
financial companies whose real raison d' tre in Jersey
is not really philanthropic, to say the least.
23. It is surprising for instance to see
the Bailiff act as a representative of financial interests in
business gatherings staged abroad by local lobbies to attract
funds to Jersey's "low-cost" banks and financial institutions.
What some observers call a local oligarchy seems to have got most
of the power in their hands and create a situation where, in the
absence of political parties as in other democracies in the Western
world, any dissenting voice or alternative proposal simply has
no access to the public arena that has in the modern world defined
the democratic ideal.
24. This political endogamy—which,
we admit, is a risk in many other countries—has taken a
degree of concentation that the dimensions of the Island and the
pre-eminence of the finance activities in the local community's
orientations have obviously increased. No direct connection, of
course, can be suggested from the latter observations to the dramatic
child abuse case, but the features we and others have identified
as specific to Jersey, ie an overall culture of secrecy
and a certain political confusion of roles within the establishment,
that also has had for long a quasi monopoly of information, may
have contributed to a gradual loss of a sense of democracy and
responsibility as naturally resulting from transparency, debate,
dialectical courteous confrontation and respect. Most observers
are puzzled to see that although Jersey looks thoroughly democratic
at the level of the parish, it becomes less and less so as one
climbs up the rungs of the power structure until it becomes very
questionable at the top (Ministerial level) where general interest
should prevail.
25. Social Rights, freedom of expression,
living conditions, employment:
One of the most surprising revelations when a
German or a French employee discusses with a Jersey counterpart
is the discrepancy between social laws in Continental Europe,
union laws, for instance, and what can be observed in Jersey.
Anti-Union laws would be more explicit as a term to describe a
situation in which, for instance, it takes 14 days' notice
to organise a ballot for industrial action.
26. Trade-Unions and political parties are
recognised everywhere else as essential elements of economic and
democratic life. This is not certain in Jersey, it seems, where
the States of Jersey did not want any discussion with the ILO
(International Labor Organisation). One can guess, of course,
it was not good publicity to let the latter show very cruel comparisons
with most other counties.
27. The recent introduction of a general
tax on goods and services (GST) by Chief Minister Le Sueur and
the recent announcement by the Chamber of Commerce that this tax
could double by 2012 seem to have been the last straw for
many within the local population, notably those who have witnessed
the degradation of their living conditions in the last few years.
Announcing that a pay-freeze in the public sector is envisaged
does not bode well for those in Jersey who already see their living
standards dropping.
28. Between 8,000 and 9,000 working
people out of 52,000, it is reported, are now on Income Support
in Jersey, a place that, for instance in its only local paper,
claims to be the third wealthiest country in the world ... What
has been, by local standards, a massive protest against the introduction
of this GST (a petition with 20,000 names, public meetings
and demonstrations) had no political translation in the States
that, to many in Jersey and abroad, tends to be seen as a Rump
Parliament ... The political apathy and the low turn-out rate
at local elections (around 30%) may indeed result from a sense
of helplessness in the face of so little consideration and understanding
being given to questions or oppositions.
29. Direct and indirect pressure by the
Finance Industry on property values has led to artificially high
prices for accommodation and French visitors from Saint-Malo,
for instance, are shocked to see the price asked for houses or
rents that is sometimes much higher than that of Paris or London
when the average income is, of course, far below that of those
cities.
30. The impact on the traditionally prosperous
farming industry or the tourist industry has been devastating
and has reinforced the burden on the most vulnerable but the almighty
Finance Industry produces around 60% of GDP!, can—de
facto—impose its requirements and demands on the Island.
A kind of vicious circle has led to a socio-political addiction
based on a "too big to fail" principle that has been
observed in other larger places with the social disaster we all
know.
31. Many inhabitants secretly agree that
it is not healthy for Jersey people and their children to have
become so dependent on what are now vulnerable finance activities,
especially a kind of finance no one seriously informed is proud
of, but very few today are able, willing or brave enough to take
the risk of saying it openly. A very popular song in France goes:
"Le premier qui dit la v
rit
, il sera ex
cut
... " ("He
who tells the truth first will be executed".). No one is
physically executed in Jersey these days, but very painful symbolic
executions take place in the Jersey Evening Post, in the local
radio or TV programmes, or in the States, every time an individual
or a group (like our extremely courageous friends of Attac Jersey
or Tax Justice Network) tries to say in public what in other countries
around has been documented, printed and publicised in the mainstream
media.
32. We could mention hundreds of articles
on the Channel Islands from Le Monde, Le Figaro,
or even regional popular papers like Ouest-France that
describe local realities or facts in relation to Jersey finance
activities in particular that could imply very serious risks indeed
for anyone publicising the same items in Jersey! One of our good
Jersey friends, for instance, simply could not believe it when
he came across an article from Ouest-France, not a leftist
radical paper, that was about Britline, a subsidiary of Credit
Agricole meant to help British purchasers of homes in France.
The director of this bank simply made it clear that as he was
suspicious of potential money laundering, "on ne prend
rien des Iles Anglo-Normandes " ("We do not take
money from the Channel Islands" ...).
33. The Passport discrimination:
Lots of observations mentioned above raise immediate
concern when they are highlighted in our interviews with journalists
or in public meetings in France or in international forums we
take part in. But the most shocking information when dealing with
Jersey always is the "historical" explanation we give
our audiences to account for the specific passport Jersey-born
people are given by Jersey authorities and that, inevitably, suggests,
with good reasons, that they have become second-class citizens
in their own land..
34. The 1973 Protocol 3 of Admission
of the UK into the—then—Common Market, the EU today,
was agreed on behalf of Jersey by the UK government and the Bailiwick
was not a contracting party. The limitations affecting the "natives",
notably on their freedom to work in Europe, constitutes a de
facto inequality of status and has made these people with
historic claims to call themselves "Jersey Folk" a sort
of "sacrificial lamb".
35. The situation is all the more outrageous
as these people and their historical singularities have been used
to justify a constitutional exception that has become the "legal"
basis for Jersey's OFC (Offshore Financial Centre)'s status, notably
with its "trusts" ("fiducies " in Fench)
that have been perverted from their original functions to provide
anonymity, opacity and tax-evasion practices for rich individuals
or highly profitable finance activities for some banks and transnational
companies.
36. We now are in a situation where French
football stars playing in British soccer clubs, for instance,
are paid in Jersey, through artificially Jersey-based companies,
to avoid full taxation in France or Britain whereas Jersey-born
people are confined to their Island and are not allowed to settle
their activities in France ... The former can enjoy the French
or any European Health System or Social Welfare without contributing
in due proportion whereas the latter have to pay the full rate
if they are taken to a French hospital or clinic unless they have
paid for their own private insurance.
37. We know that some Jersey officials have
told Jersey-born people: "Don't worry, if you seek employment
in France or Germany noone will notice the Jersey EU-exemption
stamp in your "British" passport, none will ask".
Is that acceptable?
"Holder is not entitled to benefit from
European Community Provisions relating to employment or establishment",
the stamp says. Is that discrimination acceptable? Much more could
be said about this shocking point but let us simply suggest that
beyond the individual pain it has caused to thousands of Jersey
people, it alone encapsulates the absurd situation Jersey now
is.
38. To conclude Jersey is just one instance
where the logic resulting from the finance business has now come
to dominate all other activities to such an extent that the Island
population is wholly addicted economically, politically, intellectually
to OFC's values and demands, and cannot, alone, articulate a vision
for its future. How OFC's like Jersey can be enabled to diminish
their unhealthy dependence on the specific vulnerable finance
industry that characterises those OFC's and to find a sound basis
for a more secure and dignified role is beyond the scope of this
submission.
39. But an exceptional opportunity, we believe,
is being offered just now in the light of the geopolitical overhaul
that the huge global economic and financial crisis has made inevitable.
It would be criminal to let Jersey people believe that in today's
and tomorrow's world the present institutional, political and
financial structure of their Island will be able to guarantee
any prosperity. It would also be criminal to let the same people
believe that any institutional "independence" could
avoid confrontation with the real outside world as it is being
redefined today.
40. New modes of relation and new reciprocal
rights and obligations might—and perhaps should be—considered
between such OFC's and larger nations like GB or France. ATTAC,
our association always has recognized that the massive efforts
that have been made to welcome and help former countries from
the "Eastern Bloc" join the EU could and should be replicated
to welcome and help offshore jurisdictions like Jersey that for
all sorts of historical reasons have "gone astray" and
been instrumentalised by outsiders to serve interests that, in
fact, did not coincide with the long term survival and prosperity
of their community.
September 2009
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