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UK territories defended in Panama Papers leak

| 10/04/2016 | 0 Comments
CNS Business

Anthony Travers

(CNS Business): Offshore lawyer Antony Travers, a past Chairman of the Board of Cayman Finance, has added his voice to the growing response to the Panama Papers scandal that the Cayman Islands should not be tarred with the same brush as the Central American jurisdiction. The IFC Forum, an international body representing the offshore sector in UK territories, is also trying to distance British jurisdictions from the fallout, despite the exposure of the role of the British Virgin Islands in the leak.

Travers has been doing the rounds of the UK media rebutting the lumping of Cayman with other less reputable jurisdictions. In a witty letter to the Financial Times repeated his claim that people would need to be of “unsound mind” to try and use Cayman as a jurisdiction for any improper tax structuring. Claiming Cayman sets the gold standard in tax transparency, the once outspoken Cayman Finance chairman said that was why Cayman has not featured in the Panama Papers.

The IFC said that while some jurisdictions have fallen behind in combatting money laundering and tax evasion, the British overseas territories and crown dependencies have the highest regulatory standards. Echoing comments by the Cayman government and industry players, the IFC noted that Cayman and other British territories automatically exchange tax information with the UK and US governments and are amongst the first adopters of the OECD’s Common Reporting Standard (CRS) and some of the hardest places in the world to evade taxes or launder money.

Richard Hay, Counsel to the IFC Forum, said, “It is wrong to bracket all small financial centres together as so-called secrecy jurisdictions. British IFC regulatory standards, including on tracking of beneficial ownership, are judged in peer reviews and authoritative academic studies to be amongst the best in the world.‎”

Although Cayman has not yet been cited in connection with the massive leak of documents from  Mossack Fonseca, the Panama-based law firm which was also doing extensive business in the BVI, the jurisdiction has been constantly associated with the activities revealed in the leaked documents in media reports.

More than 11 million documents have been given to a selection of media houses by the still anonymous hackers, but more are still to be released and local experts in Cayman have warned that the jurisdiction could still be directly embroiled as the documents go back decades.

In addition, the consequences of the leak for the wider offshore sector go far beyond the revelations of actual money laundering, terrorist financing, sanction breaches and tax evasion highlighted in the documents. Experts here warn that global pressures could thoroughly undermine the principle of offshore finance even for the most legitimate of offshore commercial transactions and see onshore banks and other institutions re-examine their entire use of offshore financial centres.

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Category: Finance, Financial Services

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