Offshore financial centres must "respond positively" to the joint demands of the G20 countries in order to stay competitive, according to the interim Foot Review.
It says there is "undoubtedly strong political pressure" in favour of international action to address harmful tax practices following the G20 summit earlier this month, and urges the centres to take note.
"Meeting regulatory standards is not only important for the integrity of the financial system, but also for attracting financial services business from centres which are unable to do so," Foot says in his review into Britain's Crown Dependencies and Overseas Territories.
"It will be important for the financial centres covered by the review to be able to respond positively to the emerging consensus."
Evaluations probing tax standards and money laundering, including by the IMF and Financial Action Task Force (FATF), have shown most countries are complying or intend to comply with international standards.
Britain's Crown Dependencies and Overseas Territories see maintaining regulatory standards as "an important aspect of a competitive business model," the review reads.
However, it adds: "International standards do not stand still".
The G20 is implementing a series of measures designed to bolster financial supervision, including a renewed focus on the ability and willingness of jurisdictions to provide the information and level of cooperation needed if cross border crime is to be combated effectively, says the Review.
The review is currently:
Discussing with the financial centres whether more should be done to strengthen regulatory cooperation and the sharing of technical expertise, particularly between themselves and the FSA.
Exploring whether the financial centres themselves could work more closely together to share experience and information and/or preparing to implement further major changes in international regulation
Considering whether more should be done to facilitate the exchange of information with law enforcement bodies in other countries
The review welcomes comments in its consultation period.
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