13/05/21

JERSEY: French warning of potential threat to financial services.

As published on jerseyeveningpost.com, Wednesday 12 May, 2021.

A FRENCH politician has warned that EU politicians are now considering restricting access for Jersey’s financial-services industry on the Continent in response to the fishing dispute.

Following the country’s Sea Minister Annick Girardin’s recent threat to cut off the Island’s electricity, MEP Stéphanie Yon-Courtin said that the EU could respond by targeting the Island’s largest sector.

Jersey, which has always sat outside the EU, currently accesses European markets for the finance sector through a series of directly negotiated ‘equivalence’ agreements which have been brokered over the years.

According to the Ouest-France newspaper, Ms Yon Courtin said that the EU could respond to Jersey’s decision to introduce restrictive fishing licences by limiting the issuance of equivalence agreements to the Island.

‘Jersey is a tax haven. The Island must obtain an equivalence to sell its financial products on European territory. However, we are considering greatly limiting the issuance of these equivalences,’ she said.

‘Annick Girardin, Minister of the Sea, approves. And many members of the committee as well, because Jersey must not set a precedent.’

She added that she would like Jersey to consider withdrawing from the UK and EU’s Trade and Economic Co-operation Agreement and reinstate a Bay of Granville Treaty-style agreement under which French and Jersey fishers have shared access to the Island’s waters.

‘The European Commission is currently too weak and allows itself to be exploited by the government of Boris Johnson,’ she said.

‘The Brexit treaty allows Jersey to get out of the agreements.

‘If so, we will be free to renegotiate a Granville Bay Treaty-type bilateral agreement with the Island as before. ‘

In response to her comments, Joe Moynihan, chief executive of industry representative body Jersey Finance Ltd, said that he did not expect an impact on the sector as a result of the current dispute.

‘We’re confident that this situation will be resolved quickly and, as a recognised co-operative jurisdiction with a long track record of working with the EU on financial-services issues, we do not anticipate any impact on our industry,’ he said.

Commentators have long speculated that a ‘fish for finance’ trade-off would be likely between the UK and EU as part of Brexit negotiations. The Government of Jersey was contacted for comment but had not responded at the time of writing.

Earlier this year the European Parliament passed a motion calling for jurisdictions with a zero-rate corporation tax, such as Jersey, to be blacklisted as non-cooperative jurisdictions. Jersey was singled out during the debate and labelled a ‘tax haven’ by Dutch MEP Paul Tang, the author of the resolution.