A second draft bill filed in Washington designed to deter tax evasion but which includes less draconian measures than its predecessor would be "more favourable" to Jersey.
Stephen Platt, a compliance specialist, financial crimes lawyer and chairman of the BakerPlatt Group, says although there is no doubt Washington will act against offshore tax havens, currently there is no consensus among policyholders about how to proceed.
Senator Carl Levin's Stop Tax Haven Abuse Bill which was backed by Barack Obama during his election campaign has so far only received support from four senators our of 100 in the Senate and 62 out of over 450 co-sponsors in the House of Representatives. It is therefore losing some of its momentum, according to Platt.
The bill's progress has been further upset by the announcement of an alternative bill by chairman of the Senate Finance Committee, Senator Max Baucus, he says.
"For Washington to take no action is not an option. There are two distinct proposals on the table and my instinct is that the Baucus Alternative is preferred. Senator Baucus is close to the administration, he is a leading Democrat and he heads an extremely influential committee," says Platt.
The Levin Bill notably includes a blacklist of 'offshore secrecy jurisdictions' including: Jersey, Guernsey and the Isle of Man despite the signing of information sharing measures.
Platt believes, if Levin's bill does progress, it will not be possible for any location to have its name removed from the blacklist until after the bill is passed into law.
However, Platt says he thinks the Baucus Alternative is more likely to be the preferred option of the Obama Administration. It also avoids the compilation of a blacklist of offshore secrecy jurisdictions.
Yet, the Baucus Alternative still includes some strong measures in the fight against offshore tax evasion, giving additional powers to the American Inland Revenue Services (IRS), says Platt. It would therefore be the better option for offshore jurisdictions such as Jersey, he adds.
Platt recently visited political advisers in Washington and was impressed with their knowledge of the offshore industry.
"It would be wrong to assume that the advisers to these Senate committees do not have a very thorough understanding of the different nuances of offshore jurisdictions," he says.
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