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What Brexit Means for the Channel Islands

9 January 2019

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Simon Mackenzie and Marie McNeela, managing directors of Intertrust in Jersey and Guernsey respectively, explain what Brexit will mean for the Channel Islands and how collaboration remains a key pillar of the firm’s future strategy in the jurisdictions.

The Channel Islands have long demonstrated that they can handle change and have a history of embracing the opportunities that come through change. The United Kingdom leaving the European Union, while a major development, is no different. As Crown Dependencies, the Channel Islands are not members of the EU, however they set equivalent standards for many elements of the legislative landscape and are represented in international negotiations by the UK Government. A political shift on this scale is bound to cause uncertainty but the islands have survived and prospered through turbulent times before. Brexit is another chance to demonstrate just how resilient and nimble the jurisdictions are.

Whilst Brexit represents a fundamental change after 45 years of the UK being part of the EU, some factors will remain unchanged throughout and after the withdrawal process. One of these is the Channel Islands’ attitude to the UK and to the EU. The islands have always positioned themselves as “good neighbours” and responsible global citizens. This is evidenced through the positive working relationships the islands’ governments enjoy with both the UK Government and the EU.

Think financial services. Both islands are stable, secure and well-regulated jurisdictions that adhere to the spirit as well as the letter of international standards , positioning themselves to be leading players on the global financial services stage. The recently enshrined Substance Laws in both Jersey and Guernsey are great examples of this, with both islands further demonstrating their commitment to tax transparency and anti-BEPs compliance. Both islands have built regulatory frameworks which meet the EU’s rigorous passporting requirements – Brexit, in whatever form, will not affect that and so there is a firm expectation of continued close co-operation between the Channel Islands and the EU.

A further positive is the relative political stability of the Channel Islands, especially when there is political turmoil in many parts of the world. Even with the numerous potential permutations of Brexit at the time of writing, the islands are well-positioned to help clients weather turbulent waters with minimal disruption, with established and effective trading positions with both the UK and the EU.

In a post-Brexit world, we’re expecting the Channel Islands to do more than just survive; we expect the islands to stand out as the centres of financial excellence that they are and continue to serve as vital pillars of stability that privilege the virtues of good governance, strong regulation and genuine expertise.

Collaboration will remain key

Working together is crucial for the islands and their global partners.  The same is true for Intertrust, which has previously safeguarded its continued success through its network of 2,500 experts located in 29 of the major financial centres of the world.

Historically the Channel Islands have been flexible and Intertrust is exactly where our clients need us to be. This will continue post-Brexit and we will work hard to help our clients, whatever their circumstances and geographies, and to find the right solutions for them. Brexit will not change that and nor, will it change the importance of London and the UK as a significant financial centre.