Jersey is one of the most politically stable offshore centres in the world. By virtue of its special constitutional relationship with the English Crown and arising out of over 900 years of custom and usage, the UK government has responsibility for the island's international relationships but not its domestic affairs. Jersey also negotiated a special relationship with the European Union by virtue of which Jersey remains outside the European Union for the purposes of, among other things, VAT and directives relating to fiscal harmonisation, but can trade freely with it. In relation to economic stability, Jersey is one of the few European economies that has built up a substantial strategic reserve and has no public debt. Its current low tax framework has been maintained on the island since 1940.
Jersey also has a rigorous regulatory regime.
The regulatory authority in this regard is the Jersey Financial Services Commission - a full member of the International Organisation of Securities Commissions. Through the application of its regulatory and supervisory standards, the commission exists to protect the reputation and integrity of the island in all of its commercial and financial undertakings. Protection and development of the island's reputation is an ongoing process which is taken very seriously by regulators and practitioners on the island. In 1998, the UK home secretary commissioned Andrew Edwards to review the regulation of international finance in the Crown Dependencies. The reputation of the island also benefits from legislation to regulate those working in the financial sector and has modern legislation to combat financial crime and money laundering to meet international best practice.