A small economy does not have a specific definition – it may be defined by its size, its population, its geographical remoteness, its political isolation or its limited economic diversity. Most offshore jurisdictions face issues associated with those of larger jurisdictions, but on a smaller scale. This means that the regulations they adopt should be tailored to specific market needs. It may not always be appropriate to import a regulatory or competition model from larger jurisdictions which simply does not take into account the offshore, or smallness, factor.
The Channel Islands have recently seen interesting developments – Guernsey has chosen to use a utilities regulator with no competition law as yet, while Jersey has opted for a more competition law-focused regime. The regulator in Jersey – the Jersey Competition Regulatory Authority – has powers that cover both ex-ante regulation and ex-post regulation enacted through a competition law. It is too early to say whether a broad-ranging competition law can effectively be implemented in a small island economy and whether this will have any effect on the behaviour of businesses coming to the island for what is classically referred to as the offshore ‘finance’ business. Guernsey currently faces a difficult choice in how it chooses to progress this issue and this article looks at some of the differences in the options that might be pursued.
