Captive Insurance Domicile Gets EU Endorsement Confirmation

The European Union (EU) Commission has confirmed its continued endorsement of Guernsey as a cooperative jurisdiction following a meeting between officials in Brussels, according to a news release from Guernsey Finance, the promotional agency for the island’s finance industry internationally.

Captive.com notes that Guernsey had previously been placed on the EU blacklist.

The news of the endorsement confirmation was welcomed in Guernsey, which according to the news release has a strong record in meeting international standards as a cooperative and highly transparent jurisdiction, including as an "early adopter" of the Common Reporting Standards ahead of some European countries.

Responding to the news, Guernsey's chief minister, Jonathan Le Tocq, has written to European tax commissioner Pierre Moscovici, stating (as quoted in the news release): "Guernsey welcomes the Commission's confirmation at the meeting that it considers Guernsey to be a cooperative jurisdiction. This recognises not only Guernsey's adherence to the OECD [Organization for Economic Cooperation and Development] and Global Forum international standards on transparency and information exchange, but also that our corporate tax regime has been assessed as compliant with the EU's Code of Conduct on Corporate Taxation, and hence not containing harmful measures."

The news release states that the "endorsement from the EU comes soon after the Commission included Guernsey on a list that some commentators had misperceived as a 'black list' of un-cooperative jurisdictions." The list, which was published on June 17, was widely criticized, including by the OECD, for a lack of transparent and consistent methodology and has subsequently had its name changed for clarity, according to the Guernsey Finance news release. 

Dominic Wheatley, chief executive of Guernsey Finance, said, as quoted in the news release: "We welcome the EU's endorsement of Guernsey as a cooperative jurisdiction which is fully consistent with the findings of its Code of Conduct Group on Corporate Taxation in 2012. This clarification should give full confidence to all those looking to do business in Guernsey and enjoy the high quality of the financial business environment here.

"While the confirmation of the Commission's view is positive for Guernsey, the contribution that Guernsey makes to the European economy should not be overlooked," Mr. Wheatley went on to say in the news release. "Research published by KPMG earlier this year showed that Guernsey funds have a total population of £155.4 billion assets under administration and that almost half of that is invested into continental (non-UK) Europe, demonstrating Guernsey is also an important business partner for the EU."

He continued, as quoted in the news release, "It has also been welcome to have confirmation from organizations such as the European Investment Fund that not only do they also recognise that Guernsey was not in any way 'black listed,' but also that they are aware of the positive recognition of Guernsey's track record by the OECD."