The governments of the Channel Islands, Jersey and Guernsey, have confirmed they have abandoned plans for a joint aircraft registry after being unable to meet the "separate operational and commercial interest of both islands." Previous statements from Jersey suggest that island's goods and services tax (GST) regime was the most significant obstacle to an agreement.
Confirming the decision to part ways, agreed during meetings in September, statements from both islands said that it had become apparent over recent months - after a great deal of effort and having taken independent expert legal opinion - that a single Registry "could not meet the separate operational and commercial interests of both islands and it was therefore decided that each jurisdiction would move ahead with separate plans."
Guernsey's Commerce and Employment Minister, Deputy Kevin Stewart said: "A full range of options were explored but after lengthy consideration there was not one option that was workable and [would] provide the same mutual business benefits. The result is that both islands will now be setting up separate registries."
Jersey's Economic Development Minister, Senator Alan Maclean, added: "After detailed discussions we agreed it would not be possible to establish a joint registry which would safeguard the commercial interests of each island's financial service sectors."
"Our two governments remain committed to joint working, and we will continue to look for areas where we can work together to benefit Channel Island residents. For instance, a joint Financial Services Ombudsman Scheme due to launch in early 2014."
"While the considerable commercial and operational obstacles meant a joint Aircraft Registry has not proved possible, we look forward to developing other pan-island activity in economic development."
A statement from Maclean back in January 2013 indicated that the two islands were encountering difficulties in developing a blueprint for a shared aircraft registry, which would have been based in Guernsey.
Maclean said that the islands' discussions had been focused on the unique selling point the Registry would employ in tax terms. He reported that the islands had been considering the unique selling point employed by the Isle of Man in enabling aircraft to be managed through a corporate ownership structure registered for value-added tax purposes, opening up the ability for purchasers of aircraft to reclaim VAT.
While Jersey levies a goods and services tax with a five percent headline rate, Guernsey does not operate a consumption tax, potentially placing Jersey at a competitive disadvantage in terms of its financial services industry's ability to compete for associated business. Jersey had anticipated that establishing a registry would unlock "an increase in retail sales, associated financial services and wealth management business."
Back in January Maclean had said: "The issue of [the] competitive disadvantage to the Isle of Man and other Registries presented by VAT is a challenge, but does not appear to be insurmountable."
"Discussions are currently ongoing with Economic Development and Guernsey's Commerce and Employment Department. Officials from both islands are working together to seek the best way to proceed and hope to be able to make an announcement on a final decision very shortly," he concluded.
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