CONFIDENTIAL
1
TAX HAVENS
39.
The Conference had before it a paper by lir Russell listing the major advantages and disadvantages to the territory and to Britain of tax havens in dependencies. In his view the amount of international sterling in circulation was insignificant and therefore posed no real difficulties for the UK tax authorities. Most of the funds were in the form of Durollars which went mainly to finance activity in the EFC. Cayman islands legis- lation gave better control over banks and Trust Companies than over ordinary companies, which could do much as they pleased. There was always the risk of criminal elements corrupting the whole system, as in the Bahamas.
40. In the Turks and Caicos the problem was not how to become a tax haven there were already over 1,000 companies on their register but how to make a success of it. It was clearly harder to get started today in the face of the attractions of the established havens. A good write-up in larshall Langer was a help. There were two dangers: the risk that with new tax laws in the metropolitan countries the whole edifice could collapse and the risk of corruption and gangsterism.
41.
British policy on tax havens was not clear and a firm guide line from London was needed. The Turks and Caicus development policy document drafted in 1975 had recommended that a tax haven for that territory would be a useful factor in development. This statement had not been challenged but it is not entirely consist- ent with the spirit of the conclusions of the 1970 Working Party report. Furthermore we are now precluded from actively encourag- ing the development of tax havens as a result of undertakings given to the EEC and OECD. In this context it seemed unlikely that the BVI would be authorised to enact Exempt Bodies legislation. The PVT had other attractions for the offshore finance community and might still do well with Trust Companies, for which special legislation was needed.
PRISONS
42. The Conference considered the problem of handling long term sentences in prisons which were little more than remand lock-ups. Nobody, for example, could expect a man to be imprisoned in Grand Turk for long. Transfer to another West Indian dependency was no longer the obvious course. In its favour it could provide But security with some chance of relevant work and study. against this, transportation introduced people to a hardened criminal society and it was almost impossible to maintain any family contact across the seas.
17. There were several view points: the arrangement to send long term prisoners from Montserrat to Antigua had been satisfactory but Antigua would no longer accept them. Turks and Caicos prison- ers used to go to Jamaica, the last one returning 15 months earlier. A forthcoming case in Grand Turk might result in a 4-6 year sentence; Jamaica looked the only place where this could be served satisfactorily. The Caymans still sent prisoners
Mr to Jamaica but there was a move to end this arrangement. Russell hoped that his government would agree to set up a prison farm on Grand Cayman. The Anguilla prison as a small room. Government saw no local difficulty in sending prisoners to Antigua and the Colonial Prisoners Removal Act applied.
10 CONFIDENTIAL
144.
The
Page 150Page 151
CODE 18-77
No comments yet.
Private notes are available after approval.