All of the islands are havens for businesses and individuals that want to avoid British taxes. They tailor their tax rates to help companies avoid British taxes. The tiny Jersey, with a population of 85,000, has 80 banks from 16 countries and 335 investment funds. Guernsey is similarly well provided with financial institutions. One Sark resident has been registered as a director of 3,000 companies.
Local politicians sit on the boards of banks that they regulate.
The islands' banks are also alleged to be much used for money-laundering. Drug dealers from Britain and Ireland are ferried by taxi from the airport in Manx, Isle of Man to the island's discreet banks, carrying bags full of cash. According to British press reports in June 2000 only pressure from the British government kept the Channel Islands and Isle of Man, together with the overseas territory of Gibraltar, off an OECD financial task force list of countries accused of failing to stem money flows from drug trafficking, embezzlement of international aid and other organised crime through their banking systems. Instead they were placed on a list of states whose actions were under surveillance. Jersey, a prime holiday resort, also has a serious narcotics problem.