Q: Is Jersey unique in terms of its relationship with the UK and the EU?
A: Yes, of course. Jersey is a crown dependency, which means that the British government ultimately has responsibility for it. But Jersey has its own government, it’s fiscally independent and we fund our own public services. From that perspective we’re not part of the UK, but we are part of the British Isles.
Our relationship with Europe is that we’re not part of the EU. We are, as a result of a piece of regulation called ‘Protocol 3’, part of the customs union with the EU, and that covers our trade relationship. But in relation to services (specifically financial services), we are not part of the EU.
The customs union governs some of our trade relationships; but from a services perspective, any access to the EU market needs to be negotiated. We have to be able to demonstrate equivalence if we want to be able to access the European market.
Q: Which specific services have been recognised for equivalency?
A: I think the most important and well-known regards the alternative investment fund managers’ directive, which is about marketing funds into the EU and it’s about looking at fund managers, and we have been recognised as equivalent.
Q: ‘Passporting rights’ are a huge issue for London, and negotiations on this will affect the future of the City. Is Jersey experiencing interest from groups in London that have a contingency plan if they lose these rights?
A: Jersey provides a gateway to Europe for international investors, so from the perspective of people looking to market their funds from the US in Europe, Jersey can offer that. If you can establish in Jersey, then this provides that gateway through our equivalent regime.
In terms of the UK at the moment, they are equivalent and part of the EU. Brexit hasn’t changed that yet, so there’s not any sort of change there at the moment.
Q: But have you been approached in terms of assessments or groups wanting to test the waters?
A: The UK is our largest trading relationship anyway so our lawyers, our accountants and our professional services community have great relationships with their counterparts in the City. In terms of setting up funds, a number of UK financial institutions have operations based out of Jersey. So they already will often have a presence in Jersey and one in London as well.
Brexit doesn’t change the relationship between Jersey and the EU, on the basis that we’re not part of it at the moment; we are already a third country from an EU perspective. So we have already negotiated access to the EU in relation to the various laws and regulations that we consider appropriate for our furniture services industry.
Q: Will you be looking to gain access to other fields of the financial markets?
A: We assess on a directive, regulation, legislation and one-by-one basis as to whether it is of value for our industry to obtain equivalence and therefore be able to access the EU market. So it depends based on the composition of our industry, our sector, whether we think that we need that access.
Q: Moving forward, how do you think Brexit will affect the business proposition for Jersey?
A: I think there are real opportunities coming from Brexit, for both the UK and Jersey. Jersey has a symbiotic relationship with the UK, particularly the City of London and the financial services sector. There’s a natural strength in working together. So Jersey as a carrier of capital has a great deal to offer the financial services sector and investment into the UK, in a post-Brexit environment.
Q: How does Brexit change this?
A: I think it makes Jersey an even more important part of the financial architecture for the UK, because it offers access to international capital, so Jersey pools international capital from around the world, and then deploys it into destination markets. The more we can do that and deploy into the UK, that’s to the benefit of the UK.
I don’t know that Brexit will necessarily have an impact on the constitutional relationship between Jersey and the UK; that will remain unchanged. The Brexit result – the move away from the EU by the UK – won’t affect it. It’s pretty much business as usual for us.