Inquiry into offshore financial regulation accused of only 'scratching the surface' by failing to impose public filing of accounts.
The Edwards report into financial regulation on the Isle of Man anding the surface’ by failing to impose public filing of accounts. Channel Islands has come under fire for not recommending the public filing of audited accounts.
Retired Treasury official Andrew Edwards, author of the 175-page report published last week, said authorities on the offshore tax havens should tighten up their financial disclosure rules.
But he stopped short of recommending European Union-standard rules, which require public filing of audited accounts for all companies.
He said such a move would mean many people who had set up private company vehicles in the islands may move them to other less-regulated jurisdictions.
He added that EU disclosure requirements had been designed with trading companies, rather than private asset holding companies, in mind.
Backbench Labour MP Austin Mitchell said the Edwards report had merely scratched the surface of the problem of financial regulation on the islands.
He said: ‘The very minimum reform necessary is independent financial regulation free from political influence, properly manned, powerful regulatory and investigative regimes, completely distinct from promotion of the islands.
‘There should also be an end to secrecy and the publication of beneficial ownership, proper annual reports for all companies claiming to be based there, plus registration of all agents acting for them.’
Edwards said regulation on the islands was generally good, but this did not stop him recommending a comprehensive list of reforms.
He said regulation of financial institutions should be deepened and include more on-site inspections.
The introduction of financial services ombudsmen and self-standing financial crime units in the islands’ police forces was also recommended.
Edwards said the professional regulation of accountants and lawyers on the islands was already well developed, but said such regulation should also extend to all providers of legal and accountancy services.
Edwards also recommended that members of regulatory boards should not be politicians.
To the obvious delight of the island authorities, Edwards’ report described the islands as being firmly committed to combating crime of all kind, including tax evasion and money laundering.
But island representatives were non-committal when asked how far they would implement the reforms suggested, although they emphasised legislation was already being developed to deal with some of the concerns raised.