The report provides an economic healthcheck of the three Crown Dependencies, including Guernsey and the six Overseas Territories, such as Bermuda, British Virgin Islands and the Cayman Islands.

The 90-page report covers the quality and extent of economic planning, meeting international standards on tax transparency, financial sector regulation, and tackling financial crime.  Lots of interesting stats, but few surprises as far as Bermuda is concerned (apart from the revelation that Government is considering the introduction of a bank depositor protection scheme).

It includes a report on the role of OTs in tax avoidance by UK corporates conducted by Deloitte.  In my view, this is a strange partner to the Foot Report and starkly indicates that the UK’s primary interest is not to help the OTs improve their governance and economies, but to cover their own youknowwhat.

Perhaps unsurprisingly, given the tax avoidance debate that is raging in the international arena, the Deloitte report ponders at length over the possibility of encouraging the OTs to replace their current “consumption-based” tax systems with “best practice” taxation models (!!!) such as VAT, Goods and Services Tax (GST), or Corporate Tax without damaging their competitiveness.  It indicates that, increasingly, the OTs face competition from jurisdictions (like Switzerland) that have mainstream tax models, but are able to create “tax arbitrage” through Double Taxation Agreements.

The Deloitte report is pretty inconclusive, except to wistfully point out that changing the OT’s tax systems “would reinforce the international institutional framework under which [tax] is successfully levied elsewhere”.