Ifcworld 2017
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IFCWorld 2017 ESSENTIAL ANNUAL INTELLIGENCE AND INSIGHT FROM THE WORLD’S LEADING INTERNATIONAL FINANCE CENTRES in association with NEWS RESEARCH EVENTS WEALTH AWARDS CAREERS WEALTHBRIEFING - ALWAYS AT THE CENTRE OF YOUR 360° VIEW ON THE WEALTH MANAGEMENT LANDSCAPE With 60,000 global subscribers, WealthBriefng is the world’s largest subscription news and thought-leadership network for the wealth management sector Register for a free trial www.wealthbriefng.com ESSENTIAL ANNUAL INTELLIGENCE AND INSIGHT FROM THE WORLD’S LEADING INTERNATIONAL FINANCE CENTRES Welcome to IFC World 2017. We are very proud to publish this second edition of our yearbook of the offshore world which looks at the place that international financial centres occupy in relation to one another, the ways in which they relate to, and are coping with, the latest important trends and the prospects that they have for survival and prosperity, both singly and together. In this comprehensive annual, we draw on the expertise of some of the foremost authorities on the offshore world and also on our suite of publications: WealthBriefing, WealthBriefingAsia, Family Wealth Report, Compliance Matters and Offshore Red. The earlier sections of this edition contain insights from the leaders in the field, while the latter part contains a directory of the world of international financial centres. We hope that you will find the result informative and of lasting value. Stephen Harris Chief Executive ClearView Financial Media PUBLISHED BY: ClearView Financial Media Ltd Heathman’s House 19 Heathman’s Road London, SW6 4TJ United Kingdom Tel: +44(0) 207 148 0188 www.clearviewpublishing.com © 2017 ClearView Financial Media Ltd publisher of WealthBriefing, WealthBriefingAsia, Family Wealth Report, Compliance Matters and Offshore Red. All rights reserved. No part of this publication may be reproduced in any form or by any means, electronic, photocopy, information retrieval system, or otherwise, without written permission from the publishers. CONTENTS INTERNATIONAL VIEW 7 VIEWS FROM THE JURISDICTIONS: Barbados 25 City of London 26 Cyprus 32 Gibraltar 35 Guernsey 36 Hong Kong 40 Malta 42 Mauritius 47 St Kitts & Nevis 51 JURISDICTIONS IN PROFILE 54 INTERNATIONAL VIEW: KEYNOTE ARTICLES THE PANAMA PAPERS: THE REVELATIONS THAT ROCKED THE OFFSHORE WORLD * by Chris Hamblin, editor of IFC World dislike hearing them called by the usual name of evade taxes. They also suspect the firm of helping the Panama Papers. The ICIJ, the Germany Süd- people cover up bribes to foreign officials in contra- deutsche Zeitung (which is reputed, rightly or vention of the Foreign Corrupt Practices Act 1977. wrongly, to be infested by people from the US Cen- tral Intelligence Agency) and other ‘media partners’ Governments in several countries launched civil made this information available to the public. and criminal tax evasion investigations in relation to the leaked data in 2016. By October, they in- PENDING PROSECUTIONS clude the United States of America, Australia, Can- ada, Denmark, France, Germany, India, Israel, Mal- The law firm itself appears to be less than squeaky- ta, Norway, Pakistan, Singapore, Spain, Sri Lanka, clean, never mind its customers. Legal papers pre- Sweden, and Thailand – a mixture of offshore and sented to a US District Court in Las Vegas claimed onshore jurisdictions. that it had created 123 companies in Nevada that a crony of Argentina’s former president used to steal The whole torrid saga now seems to have come millions of dollars from government contracts. The to a head with the arrest of Mossack Fonseca’s It was in April 2016, just during the publication of court issued a subpoena ordering Mossack Fon- partners and the takeover of FPB Bank by the Pan- our first edition, when the Washington-based In- seca to hand over details about any money that amanian Superintendency of Banks. Offshore com- ternational Consortium of Investigative Journalists might have flowed through those companies. The panies registered by the law firm allegedly helped published information from a massive data-leak law firm, according to the ICIJ, did not want the the tiny bank move clients’ money out of Brazil that shone a searing light on the part that Mossack information to become public, so it denied that MF illegally. Fonseca, the fourth largest provider of offshore ser- Corporate Services (Nevada) Ltd, which was run- vices in the world, played in obscuring the benefi- ning its business in Vegas, was actually part of its PEP LESSONS cial ownership of wealth on behalf of its customers. group. The ICIJ, on its website, recounts how Jürgen The political storm that followed is still reverber- Mossack swore an oath to that effect, but its cache So many lessons about ‘politically exposed persons’ ating around the offshore world and has changed of records “show that the Nevada subsidiary was or PEPs have been drawn from the recent revela- the climate of business there forever, with no end wholly owned by Mossack Fonseca [and] behind tions that it is hard to know where to begin. There in sight. the scenes, the firm took steps to wipe potentially have, however, been a few obvious choices. damaging records from phones and computers to A month later the ICIJ issued more information on keep details of their clients from the United States ICELAND hundreds of thousands of accounts in a “searcha- justice system.” ble database that strips away the secrecy of nearly Sigmundur Davíð Gunnlaugsson, the prime min- 214,000 offshore entities created in 21 jurisdic- ister of Iceland who had to resign soon after the tions, from Nevada to Hong Kong and the British papers became public, secretly owned Wintris, a Virgin Islands.” Mr Cameron senior company based on the Caribbean island of Tortola, which owned and still owns debt in some of Ice- The data came from the Panamanian law firm’s used a Bahamian land’s failed banks just at the time when he was files. The hacker or leaker has never been caught. involved in political decisions about their future. The roll-call of customers, which the ICIJ has made bishop to sign many His wealthy wife, née Anna Sigurlaug Pálsdóttir, available on its online database, includes tax-evad- owned half the company with him. He never di- ers, drug-dealers, corrupt politicians and Mafiosi. documents vulged his shareholding to the compulsory Icelan- Half of all the companies that are mentioned in the dic parliamentary register for MPs’ financial inter- data were incorporated in the British Virgin Islands. ests. When asked the simple question “what can The papers reveal the offshore holdings of 140 pol- Emails, according to the ICIJ, show senior figures you tell us about a company called Wintris” during iticians and public officials, including 12 current at the firm asking for evidence of company own- an English-language interview with SVT, a Swedish and former world leaders, who used the offshore ership of the Nevada operation to be hidden from television company, he smirked guiltily, lapsed into entities to hide the ownership of their assets. The the prying eyes of investigators, and for people to Icelandic and, after floundering for less than half papers’ worth to governments the world over, em- remove papers from Nevada to Panama, the better a minute, rose to his feet and walked out of the barrassed as they may have been initially, is also to throw the authorities off the trail. room. evident because some of them are already using the revelations to justify more surveillance, more The Wall Street Journal reported in July that US THE HEIR TO BLAIRMORE government involvement in financial firms, and prosecutors, led by the Manhattan US attorney’s more compliance activity. office and the Justice Department’s main office in When British opposition leader Jeremy Corbyn Washington, had commenced criminal inquires re- pointed out that the Panama Papers had revealed Rather suspiciously, and especially so because lating to the Panama Papers. They are reportedly tax evasion “on an industrial scale” and suggested the leaks came from the Western Hemisphere, looking at a handful of lower-level Mossack Fon- that the secretive company set up by premier Da- no American politicians have been embroiled in seca employees, but are planning to widen their vid Cameron’s late father might have ensured that the scandal. The Panamanians, for their part, refer probe with a view to finding out whether the firm “tax has not been paid,” calling for an investiga- to the leaks as the Mossack Fonseca Papers and knowingly helped its clients launder money or tion into the matter, Cameron himself refused to IFC WORLD 2017 8 answer questions about the family finances before The London Guardian has stated categorically that A NETWORK THAT COULD NOT EXIST finally admitting, with perfect composure but a in 30 years Blairmore has never paid a penny of tax WITHOUT PUTIN’S ENCOURAGEMENT very red face, that he had indeed benefited from in the UK on its profits. A prospectus that it issued his father’s offshore trust. in 2006 said that the fund “should be managed and Putin’s network is held together by ties of person- conducted so that it does not become resident in al loyalty. Banker Yury Kovalchuk and businessman the United Kingdom for UK taxation purposes.” Arkady Rotenberg, both old friends, the latter of Perhaps actual tax evasion was not the aim, but whom has benefited from fortuitous government Putin’s network is it is also known that the structural contortions by contracts, are part of the network. When reviewing which Mr Cameron senior obscured Blairmore’s the Mossack Fonseca data, the ICIJ discloses that held together by ties profits were expensive to arrange and therefore “audio recordings and witness accounts show that must have been of some very heavy benefit to the even when Putin’s closest confidants privately dis- of personal loyalty investors.