Regulation can tackle havens, says review chief

The head of a government-commissioned inquiry into tax havens has suggested that closer co-operation between global regulators is the best way to hold offshore centres to account.

The review of offshore centres, including Jersey, the Isle of Man and Bermuda, comes as governments discuss regulations to get tough with offshore tax havens, which they claim cost them tens of billions of pounds in lost tax revenues.

Michael Foot, a former managing director of the Financial Services Authority and head of the review, will examine issues including whether offshore financial centres are transparent enough, regulation and tax. Speaking to Accountancy Age, Foot dismissed claims that regulation of offshore tax havens had failed.

He said the International Monetary Fund regulary reviewed off-shore havens and had given them clean bill of health.

‘I can’t see where the regulation failure is supposed to be,’ he said. ‘Any problems in the Channel Islands or the Isle of Man, you’d start with the global regulators or the Financial Services Authority, not the internal regulators of these countries.’

Foot has previously worked at offshore tax centre Bermuda, where he was an inspector of banks and trusts companies at the Central Bank of the Bahamas. He said that he had no preconceived ideas about the review’s findings.

‘I’m not starting from complete zero,’ he said. ‘I know a lot of the issues quite well.

‘There are some difficult elements to it but I wouldn’t have taken it on otherwise,’ he said.

But Labour MP Austin Mitchell said Foot’s previous employment at an offshore centre raised questions over his neutrality on the issue.

‘[Foot’s appointment] is part of a trend appointing poachers as gamekeepers. As a former participant in an offshore tax haven is he really qualified to investigate it?’