As you read this, I am winging my way overhead, on a sleazyJet flight from Southend to Jersey. I normally go from Stansted, but timing was against me and so I am sampling the delights of one of London’s smaller airports, and the world’s most orange airline. Looking at my diary for the coming month, I see that I am scheduled to visit Guernsey, Jersey and the Isle of Man. When I told a friend this, she asked, “Why islands?” And it is a good question.
I don’t want to get into that hoary old debate about “offshore island = tax haven” – too lazy, and patently untrue, given that eny fule no that the most successful jurisdictions for tax evasion are the big onshore ones. For my part, my clients tend to come from jurisdictions with an active – indeed often dominant – financial sector. For such jurisdictions, the reputational damage of a major money laundering scandal would be tremendous, and perhaps even fatal – whereas the UK financial sector, for instance, can take a hit the size of Abacha and still keep going. And islands today have a tough time of it, looking for ways to survive in the modern world. Guernsey’s main natural resources are tomatoes, flowers and milk; the Caymans can offer fish and turtles. And so, casting around for ways to support their growing populations, island governments often light on financial services as a good alternative – but in order to protect their reputation and so their business, they have to take it very seriously indeed. Clients in the islands I visit often complain – with some justification – that they are expected to be “whiter than white” when it comes to AML/CFT, and that they are expected to put in place more stringent procedures than their onshore competitors. Luckily for me, these procedures include the provision of training – hence my bilious orange arrival in Jersey today.