THE EDWARDS REPORT: A COMMENTARY
 
The Edwards Report was published on 19th November 1998. It contains modest proposals for reform to the financial regulations in the Channel Islands and the Isle of Man (hereafter referred to as the Islands). These include a call for:
 

• All Crimes Money laundering Legislation
• Removal of prosecution time-bar
• International co-operation legislation
• Regulation of director services
• Changes in Trust Law legislation
• Regulation of nominee companies and directors
• registration of companies
• Information agreements with other authorities
• Licensing and regulation of trust companies
• Financial Services Ombudsman
• Need for companies to publish information about their affairs
• Fighting money laundering

• Why have the Channel Island authorities failed to introduce such basic legislation. The Report is an indictment of the corruption and conflict of interests prevalent in the Islands institutions which spend the money on PR and hot-air rather than real reforms. Edwards is silent on the political institutions and their role in creating the present sleaze. Without institutional and political reforms there will be no durable change.

• Edwards ignores the conflicts of interest in Jersey e.g. the overlapping of legislative, business and judicial concerns.

• Fight against money laundering requires 'openness'. Edwards ignores the fact that in Jersey 'dissenters' are ruthlessly silenced. There are no institutional structures to help them or any whistle blower.

• There is no moral reason for having 'secrecy' and 'tax evasion' facilitated by the fiddle factories. The OECD has already argued that the tax havens are responsible for harmful tax competition that means that the wealthy elite escape taxes in their home countries and inevitably ordinary people pay more taxes. Edwards does not even consider these aspects.

• Tax havens encourage flight of capital and with it global market and political instability. Edwards is silent on it.

• The Channel Islands may have more than £400 billion but little of it generates any meaningful economic activity of the Islands. It is used to undermine other economies. It is used for speculation and undermines economic stability.

• Edwards does not say who he consulted during his consultation. The background information is not available. Under pressure from a ruling elite, he has clearly filtered or ignored some matters. He does not why he has done so. For examples, considerable evidence was submitted about the Cantrade and other scandals. But the report ignores the information.

• The Jersey authorities have already stated (press conference, 19th November 1998) that they will ignore many of the rather modest Edwards proposals. They will continue to facilitate 'secrecy'. This undermines the spirit of the Report. There are no concrete proposals for implementing the Report.

• None of the regulators proposed by Edwards would  owe a 'duty of care' to anyone. Therefore, they will have no economic incentives to do any job well.

• The Edwards Report is full of contradictions. For example, he gives the impression that things are not too bad and then says that 15,000 BCCI depositors  for the accounts held in the Channel Islands failed to come forward after the fraud ridden bank was closed -down. Why?

• He thinks there is reasonable openness (oh, really), but companies located in the Islands were used to facilitate weapons to break the UN embargo on arms to Rwanda and Zaire. None of the authorities in Jersey or the Isle of Man investigated the money laundering which became known as the AGIP affair (see our publications section).