Foot Report of the Independent Review of British Offshore Financial Centres
"Foot Report" conclusions positive for the Isle of Man
The UK Chancellor commissioned Michael Foot in December 2008 to conduct a review of the three Crown Dependencies (the Isle of Man, Guernsey and Jersey) and six Overseas Territories (Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar and the Turks and Caicos Islands). Its remit was to investigate their role and impact on the UK economy.
The report was published on 29th October 2009 (and includes an interesting tax study commissioned by Deloitte) to investigate the uses of corporate structures in the Crown Dependencies and Overseas Territories and noted that the Isle of Man along with the other Crown Dependencies "make a significant contribution to the liquidity of the UK market." The report also states "together, they provided net financing to UK banks of $332.5 billion in the second quarter of calendar year 2009, largely accounted for by the 'up-streaming' to the UK head office of deposits collected by UK banks in the Crown Dependencies." The second quarter of 2009 brought around $40 billion from the Isle of Man alone. The role of the Crown Dependencies and Overseas Territories' banks in supplying UK parent banks with finance is therefore critical, particularly at this moment in time.
Other positive comments on the Isle of Man included its move to the automatic exchange of information by July 2011, its financial ombudsman similar to the UK and its position with regards to the goods and sales tax in place (VAT sharing arrangement) which other Crown Dependencies and Overseas Territories are encouraged in the report to adopt.
Michael Foot, a former Bank of England official who visited the island in April 2009 makes it clear that the jurisdictions can no longer rely on financial help from the UK if economies are mismanaged but the report does appear to recognise that the Isle of Man has made great efforts to ensure it is well regulated.
For the full report please visit: www.gov.im/lib/docs/cso/footreviewwebcomplete.pdf.
6th November 2009
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