31 March 2016

ICT: Data Controllers Sensitised on cloud computing and biometric data

A Data Protection workshop, aiming at sensitising Data Controllers on various topics such as cloud computing and biometric data that are of major concern for organisations, opened this morning in the Lunch Room of the National Assembly in Port Louis.

Organised by the Data Protection Office, which operates under the aegis of the Ministry of Technology, Communication and Innovation, the half-day workshop’s presentations focused on privacy impact assessment, use of smart device apps, data sharing and security of personal data.

In his address, the Minister of Technology, Communication and Innovation, Mr Etienne Sinatambou, stressed on the importance of the right to privacy. Data protection has to be one of the fundamentals of our democracy and the Data Protection Office and Government is very right to insist on the obligations that it has imposed under the Data Protection Act, he said. The Minister also noted that the Act now has a number of lacunae which time has revealed and thus needs some updating due to developments that have occurred globally.

According to Mr Sinatambou, it would be wise to look at data protection within the wider spectrum of cybersecurity. On that note he lauded the fact that Mauritius now ranks 9th on the Global Cybersecurity index and first in Africa. He called for more efforts to make sure that we distance Uganda which is ranked 10th and second in Africa and for Mauritius to aspire to be in the top five.

The Minister moreover said that all that is being done with regard to data protection has as objectives to increase the national cake, make sure that our country continues its level of progress from an economical and financial point of view and ensure that our people get a better life.

For her part, the Data Protection Commissioner, Mrs Drudeisha Madhub, stated that there is a pressing need to adopt a more proactive approach and design data protection safeguards from the very outset in all ICT-driven technologies and architectures. The data protection community is standing at a pivotal technological moment where it has a unique opportunity and responsibility to carve the future of privacy for the global digital economy given the important reforms being carried out in this field, she said. Mauritius is also aiming to become a cyber-model for the region and it is high time that our data protection regime work not only in our local context, but at the same time be at par with international challenges, added Mrs Madhub.

It is recalled that the data protection regime has been in force in Mauritius for more than seven years now. In fact, the Data Protection Office is in operation since February 2009 when the founding section of the Data Protection Act 2004 came into force. The Data Protection Office aims at protecting privacy rights of individuals. An annual report is submitted to the National Assembly of Mauritius under section 55 of the Data Protection Act each year.

FSC Mauritius issues Public Notice – Revocation of the Investment Dealer CityGate

Revocation of the Investment Dealer (Broker) Licence and Category 1 Global Business Licence of CityGate Securities Limited


30 March 2016

LUX: Staging a Service Revolution in a Resort Chain

LUX* was a successful hospitality group operating in the Indian Ocean as well as other locations. In its previous incarnation, the company suffered from poor financial performance, poor service quality and a weak brand. A change in the leadership of the company led the group through a transformation, which showed positive results within 12 months. This case study describes a service revolution that lead to rapid improvements in service culture and guest experience, which in turn lead to sustained financial improvements on a quarter-on-quarter basis.

The IMF and global exchange rates: dissensus in Washington

In many scholarly and activist circles, the International Monetary Fund (IMF, or ‘the Fund’) has a reputation as a global bully. The phrase ‘Washington consensus’ has come to invoke a rigid orthodoxy of austerity and liberalization which the Fund, along with its cousins the World Bank and the US Treasury, imposes on developing countries. As an organization, the IMF is seemingly monolithic, drawing comparison to the Vatican even amongst its own staff.

OUPblog

Tod S. Van Gunten is a Postdoctoral Fellow at the Max Planck Institute for the Study of Societies. His recent article in Socio-Economic Review, is “Washington dissensus: ambiguity and conflict at the International Monetary Fund

29 March 2016

Brexit in the city: what would be the impact of the UK becoming a third country state?

Currently a UK-authorized bank, insurer or securities firm has the right to carry on business in another EEA state without further authorization. This passporting right allows UK firms to access European markets and over 2000 UK investment firms benefit from a passport under MiFID. UK firms will lose this right if it exits the EU without mutual recognition.

28 March 2016

Mauritius: FSC issues Public Notice – Disqualification of Officer – Mr Kaviraj Rookny

FSC issues Public Notice -  Disqualification of Officer - Mr Kaviraj Rookny » Read More

Mauritius: FSC issues Public Notice – Disqualification of Officer – Mr Terry Thomson

FSC issues Public Notice -  Disqualification of Officer - Mr Terry Thomson » Read More

Mauritius: FSC issues Public Notice – Disqualification of Officer – Ms. Tanusha Sobrun

FSC issues Public Notice -  Disqualification of Officer - Ms. Tanusha Sobrun » Read More

Mauritius: FSC issues Public Notice – Revocation of the Licences of FX Primus Limited

Revocation of the Investment Dealer (Currency Derivatives Segment) Licence, Investment Dealer (Full Service Dealer excluding Underwriting) Licence and Category 1 Global Business Licence of FX Primus Limited (‘FXP’)


IMF Publishes Work on the State of the Global Financial Safety Net

The International Monetary Fund (IMF) today published the paper “The Adequacy of the Global Financial Safety Net,” which the IMF’s Executive Board discussed during an informal session as part of the Fund’s ongoing review of the international monetary system. The paper assesses the strengths, weaknesses and challenges of the Global Financial Safety Net (GFSN) –comprised of international reserves, central bank swap arrangements, regional financing arrangements, Fund resources (complemented by other multilateral and bilateral development partners), and market-based instruments.

The paper establishes that the GFSN today is much larger and more multi-layered than before, reflecting the accumulation of reserves, the expansion of bilateral and multilateral arrangements, and greater access to Fund resources. Several features of the GFSN have also been enhanced over time. Notably, the refinements to the IMF’s surveillance and lending frameworks have filled important gaps in the system. However, the study also recognizes that there is scope for improving the current configuration of the safety net, to enhance the predictability, reliability and speed of insurance and financing mechanisms against shocks, and provide the right incentives for countries to implement sound macroeconomic policies.

Indeed, the multi-layered system, though diversified and flexible, has also led to uneven coverage across countries and uneven policy implementation. Additionally, many of the elements of protection are costly for borrowers – either from a financial perspective (i.e., reserves, commodity hedging) or from a political perspective (i.e., issues of stigma related to access to Fund arrangements). Moreover, most country groupings remain underserved by the system, lacking access to predictable and reliable funding.

The Board’s informal meeting helped inform a discussion of the diagnosis. As a next step, Fund staff will continue technical work on possible avenues for reforms going forward. The GFSN is also a priority of the Group of 20 and will be discussed by ministers of finance and central bank governors in the upcoming High-Level Seminar on International Financial Architecture on March 31 in Paris.

IMF: Adequacy of the Global Financial Safety Net

The Global Financial Safety Net (GFSN) is comprised mainly of countries' own reserves and external public sources of insurance and financing. The main external official arrangements are central bank bilateral swap arrangements (BSAs), regional financial arrangements (RFAs), and the Fund. The safety net seeks to provide countries with insurance against crises, financing when shocks hit, and incentives for sound macroeconomic policies.


25 March 2016

Mrinal Roy: Breached Trust and Political Pipe Dreams

Mauritius and no country for that matter, can hope to achieve its ambition to establish a vibrant and prosperous international financial services sector of repute and attract top financial operators in the sector or provide an enabling and safe environment for substantial foreign direct investments to boost growth towards transforming the country into a high income economy, if the sacrosanct rule of banking confidentiality is irresponsibly breached.

Excerpts:
Unlike whistle-blowers providing information on covert bank accounts opened in tax havens to evade taxes, intentional disclosure of fiduciary and confidential information regarding individual account holders in a commercial bank is unacceptable and condemnable. Such wanton and damning leaks of privileged information undermine the foundations of one of the major pillars of our growingly more and more services-based economy. It is tantamount to a hara-kiri of the financial services sector.…
The intentional disclosure of the confidential terms of a loan contracted by the ex-Minister of Finance in the press in violation of the rule of banking confidentiality enshrined in the Banking Act is profoundly damaging for the country. If commercial banks cannot through the highest benchmarks of banking ethics, rigorous in-house procedures and a robust culture of banking confidentiality safeguard the confidential terms of a loan agreement contracted by the Minister of Finance of the country, how on earth can we expect foreign investors or financial operators to trust and use the services of our financial services sector?…

24 March 2016

A Leak In Paradise / L’homme qui voulait détruire le secret bancaire

A journey to the heart of tax havens and institutionalised secrecy with Rudolf Elmer, the Swiss whistleblower who, through WikiLeaks, revealed to the world the dirty secrets of a Swiss private bank located in the Cayman Islands.


“A Leak In Paradise” is an investigative documentary about the offshore world built on two deeply intertwined stories:
  • the personal story of Rudolf Elmer, a former bank manager in the Cayman Islands who is now crusading against tax havens after having allegedly breached bank secrecy laws by publishing sensitive banking data on WikiLeaks;
  • the recent turmoil in the global financial system and its misadventures – from the subprime crisis with its domino effect on finance and the economy, to the Madoff scam and tax evasion mega-scandals in Liechtenstein and Switzerland.
The personal story of Rudolf Elmer, repentant banker and whistleblower, will highlight and provide perspective on the recent systemic story of global finance. Few people know it but the opacity and lack of regulation in international offshore centres are at the core of the financial crisis of 2008 – the worst since 1929.

“A leak in paradise”: behind the scenes of an ongoing robbery.

22 March 2016

IFC Demonstrates Funding Opportunities for Private Investors in Changing African Markets

Africa remains a region with enormous potential for private investors despite economic headwinds and reduced liquidity that are creating challenges in managing risks and mobilizing partners around investments, according to a report released today by IFC, a member of the World Bank Group, in partnership with the Africa CEO Forum. It concludes that even in difficult economic and risk environments, methods of financing that better mitigate risk can be more widely adopted to fund successful investments on a larger scale in Africa. 

The report, New Horizons in African Finance: Reducing Risk and Mobilizing Financing on New Scale, finds that enduring trends of rapid urbanization, increasing stability, a young and growing population, expanding internet connectivity, rising incomes, and shifting consumption patterns continue to create an abundance of commercial opportunities across the continent. Investment opportunities are strongest in sectors like clothing, communications, energy, financial services, food, health, housing and transport. Meanwhile, while Africa could absorb $90 billion in infrastructure spending each year, only about half that amount is being invested. And the continent requires $5-10 billion annually to adapt to climate change, including private investment. 

Jingdong Hua, IFC Vice President and Treasurer, said, “We need to learn from recent projects that are bringing together development finance institutions with private commercial banks and other financiers, along with public and donor support. Successful funding approaches need to be expanded upon to reduce risk, mobilize funds, and build local capital markets to meet the enormous opportunities presented by the ongoing transition in Africa.” 

Projects highlighted in the report demonstrate how innovative structuring and approaches can mitigate risks and crowd in institutional investors to allow for a higher probability of success. The approaches include public-private partnerships, co-financing, blended finance, local capital markets and tailored solutions, and private equity. 

Amir Ben Yahmed, Founder and President of the Africa CEO Forum, said, “Our annual gathering of business and government leaders from around Africa is demonstrating the continued interest in private investment on this continent. Investors are looking for new approaches for dealing with changing market conditions, and this report offers ideas and solutions for investors to consider and act upon.” 

Successful examples of recently financed projects come from across the African region, with details of project structures and risk mitigation tools highlighted in the report. They include the Azito 3 power project in Cote d’Ivoire; an Ecobank Transnational SME lending program in West African conflict-affected and fragile states; a Cargill-SIB partnership to support agricultural coops, also in Cote d’Ivoire; A local currency bond issue by Bayport Financial Services in Zambia; Bridge International Academies’ funding for expansion in Kenya and other African countries; Africa Improved Food Holdings’ nutritious food production project in Rwanda; a large regional private equity fund raised by Helios Investment Partners; and a restructuring and privatization of Eleme Petrochemicals in Nigeria. 

Report in English | Rapport en Français

Mauritius: 2015 Article IV Staff Report and Statement by the Executive Director for Mauritius

Mauritius’ upper-middle income economy has continued to grow at a moderate rate; inflation is low; and the external position has improved. Macroeconomic conditions remain stable but the authorities face macro-financial challenges stemming from the recent collapse of a large financial conglomerate, which affected the real economy, as well as risk exposures and potential spillovers from the massive offshore sector and its sizeable inter-linkages with domestic banking activities. These challenges, discussed in the FSAP and in the consultation as a macro-financial pilot, require a significant strengthening of the macro-prudential and financial stability policy frameworks. The authorities are also resolute to avoid the middle-income trap, but face a tight tradeoff, anchored by a statutory medium-term debt target, between spending on social entitlements versus infrastructure upgrading, much needed as competiveness and productivity have been eroding and investment rates declining. Given the low female labor force participation in a shrinking labor force, the consultation with Mauritius is also a pilot for the analysis of gender inequality.



21 March 2016

New Mauritius Hotels says fraud of some 115 million rupees

Once detected by management, the Board of Directors, as well as the Banks through which the transfers were made, were immediately informed of the fraud and the matter was reported to the Police for investigation and action. All possible steps are being taken, both in Mauritius and overseas, to try and recover the stolen monies.


18 March 2016

Anil Gujadhur: Trusting our Institutions

The British bequeathed to us a strong sense of discipline. It began at school. It was then taken to the workplace. Rules were strict. Any wilful violation of rules was firmly dealt with. So, people did not have a lot of incentives to misbehave.

Most of those who held high office cultivated and carried with them a sterling character for which they were renowned in society. They would not be swayed by private pursuits to indulge in the dereliction of duties. In some cases, we were strengthened in this approach by our own parallel cultural norms.

Excerpts:
The leakage of information about the Minister of Finance’s loan transaction with the State Bank of Mauritius (SBM) through the press last week was a pointer to the extent to which even some among those who are explicitly enjoined by the laws of the country to observe confidentiality about customers’ transactions – let alone their instinctive sense of duty -- actually betray a lack of moral principles and basic professionalism…
I do not care about the politics behind all this. However, I might suggest that the State Bank should cease and desist from finding itself exposed for not having lived up to the normal expectation of trust placed in it by its clients. The public, especially outsiders, should not generalize this incident and get the false impression that their information is not protected by law in our financial system. It is…
Mauritius Times

17 March 2016

IMF Executive Board Concludes 2015 Article IV Consultation with Mauritius

On March, 11, 2015, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Mauritius.

Mauritius has continued to grow at a moderate rate of 3.4 percent in 2015, as weak external demand, protracted decline in construction, and the collapse of a large financial conglomerate group more than offset the positive impact of favorable terms of trade. Inflation remains low (0.4 percent in January 2016), reflecting in part declining oil prices and shipping costs. Unemployment hovers around 8 percent, although it is higher among women and the youth. The external current account deficit narrowed to about 5 percent of GDP and international reserves increased to 6.5 months of imports, supported by continued capital inflows.

The monetary policy stance remains broadly appropriate against the backdrop of subdued inflation. The Bank of Mauritius reduced its key policy rate by 25 bps in November 2015, to 4.40 percent, in order to support the domestic economy, while making progress in mopping up excess domestic currency liquidity.

In the financial sector, credit growth is gradually recovering and overall, the banking system remains well capitalized. Nonetheless, domestic non-performing loans have been rising and provisioning has not kept pace with the decline in asset quality. In addition, the authorities face macro-financial challenges stemming from risk exposures and potential spillovers from the very large offshore sector and its sizeable inter-linkages with domestic banking activities.

The budgetary performance turned more prudent in 2015, reversing the deterioration of recent years. In 2015, both the overall consolidated deficit and the primary deficit remained below earlier budget projections, and improved relative to 2014. Nonetheless, public debt continued to increase (by more than 2 percentage points of GDP) due to the government’s interventions in the financial sector and the impact of the depreciating rupee on external debt.

The country’s statistical capacity continues to be strengthened as the authorities actively pursue efforts to improve the coverage of the offshore sector in official data, and to introduce a real estate price index.

Executive Board Assessment

Directors commended the authorities’ efforts to maintain a stable macroeconomic environment and foster a more diversified economy. While the country’s economic outlook is favorable, they noted the macro-financial risks from a potential slowdown in offshore activities and vulnerabilities in the banking sector. They encouraged the authorities to continue to strengthen macroeconomic and financial sector resilience and to pursue structural reforms to raise productivity and growth.

Directors urged the authorities to address potential spillover risks from the complex inter-linkages between large offshore activities, the banking system, and the domestic economy. They underscored the importance of upgrading the macro-prudential policy framework, and recommended creating a macro-prudential authority with a central role for the bank regulator to improve the assessment and mitigation of systemic risks. They also emphasized the urgency of addressing information gaps regarding offshore business companies and their role in conglomerate groups.

Directors stressed the need to improve consolidated supervision and oversight of mixed conglomerates, in line with the FSAP recommendations. They recommended reconsidering tax incentives that distort bank risk-taking toward cross-border and offshore activities; promoting better foreign currency liquidity management at domestic banks; strengthening the ability of the Bank of Mauritius to supervise bank holding companies and monitor cross-border risks; developing a comprehensive framework for crisis prevention and management; and upgrading the bank resolution framework prior to introducing deposit insurance. Directors also noted that the financial inter-linkages and potential spillover risks warrant a further bolstering of foreign currency buffers, and encouraged the authorities to seek appropriate financial insurance mechanisms. Directors supported the cautiously accommodative monetary stance in view of the subdued inflation environment.

Directors welcomed the authorities’ efforts to halt the fiscal deterioration in recent years and stressed the importance of putting in place a credible medium-term strategy to safeguard debt sustainability. With a view to creating space for growth-enhancing infrastructure investment, they recommended containing current spending while better targeting priority social expenditure, broadening the tax base, improving the efficiency of public entities, and targeting divestiture proceeds for debt reduction. They also underscored the need to introduce an operational framework for monitoring fiscal risks and contingent liabilities arising from public-private partnerships.

Directors welcomed the authorities’ commitment to raise growth and competitiveness by addressing infrastructure bottlenecks and skills mismatches, reducing the cost of doing business, and facilitating further diversification of the economy. In this context, they underscored that increased female labor force participation and immigration of skilled workers would help mitigate the impact on growth of the projected labor force decline.

Singapore: Public Consultation on Draft Income Tax (Amendment No. 2) Bill 2016

1. The Ministry of Finance (“MOF”) is conducting a public consultation on the draft Income Tax (Amendment No. 2) Bill 2016 from 1 to 18 March 2016, and invites the public to give feedback on the draft Bill. The proposed amendments to the Income Tax Act (“ITA”) allow Singapore to implement the Common Reporting Standard (“CRS”) with effect from 1 Jan 2017. This is necessary before Singapore can carry out her international commitment to commence automatic exchange of financial account information (“AEOI”)[1]  under the CRS in 2018.

BACKGROUND

2. As conveyed on 3 Nov 2014[2] , Singapore will commence AEOI under the CRS in 2018. Such information exchanges will be carried out on a bilateral basis with jurisdictions which Singapore has signed Competent Authority Agreements (“CAAs”)[3]  with. This will be subject to the following conditions:

a) There is a level playing field among all major financial centres, including Hong Kong, Dubai, Switzerland and Luxembourg, to minimise regulatory arbitrage;

b) We will only engage in AEOI with jurisdictions that have a strong rule of law and can ensure the confidentiality of information exchanged and prevent its unauthorised use. This is particularly important as AEOI entails the transmission of sensitive taxpayer information which should be safeguarded;

c) There must be reciprocity with any future AEOI partners in terms of information exchanged.

3. In this regard, Singapore will prioritise AEOI of CRS information with jurisdictions with strong rule of law, such as UK and France.

PROPOSED AMENDMENTS

4. In line with our 2018 international commitment to commence AEOI under the CRS, MOF has proposed amendments to the ITA. Salient aspects of the draft legislative amendments are as follows:

a) The draft Bill makes clear that existing AEOI provisions in the ITA, which were earlier introduced to implement the Singapore-United States Foreign Account Tax Compliance Act Intergovernmental Agreement (“FATCA IGA”)[4] , are applicable to any other AEOI agreement that is in accordance with the CRS. This will enable Singapore to sign CAAs with other jurisdictions to implement AEOI under the CRS.

b) The draft Bill requires and empowers all FIs to collect and retain the CRS information for all non-Singapore-tax-residents, instead of only from tax residents of jurisdictions with which Singapore has a CAA.  This is known as the “Wider Approach”. This approach is cost efficient for the industry since FIs would not need to repeatedly review the same accounts to re-establish whether the accounts are reportable each time Singapore enters into a new CAA. The Wider Approach has also been adopted by many jurisdictions such as the UK, Sweden, Japan and Korea. FIs will only need to transmit to IRAS the information relating to tax residents of Singapore’s CAA partners, for IRAS to implement the AEOI under the CRS accordingly. 

c) The draft Bill vests in IRAS the necessary powers which include mandating the electronic filing of returns and information, to implement AEOI under the CRS effectively.

5. Please refer to the draft Income Tax (Amendment No. 2) Bill 2016 and its accompanying Explanatory Statement for details.

6. Other than amending the ITA, IRAS and the Monetary Authority of Singapore (“MAS”) will be introducing draft regulations for public consultation by the second quarter of 2016. The regulations will include the proposed list of Non-Reporting Financial Institutions and Excluded Accounts, the due diligence and reporting requirements to implement the CRS.

GUIDELINES

7. We would appreciate your support and participation to ensure that the consultation exercise is productive and focused.  Respondents are requested to observe these guidelines:

a. Please identify yourself as well as the organisation you represent (if any) so that we may follow up with you to clarify your comments, if necessary. 
b. Be clear and concise in your comments. 
c. Focus your comments on how the legislative amendments can be better written to make them clearer and to make compliance easier, or on how the policy changes can be improved.
d. Use the prescribed template provided to organise your feedback.
e. As far as possible, please explain your points with illustrations, examples, data or alternative formulations of the amendments.

8. This draft legislation is released only for the purpose of consultation and should therefore not be used for individual or business decisions as it does not represent the final legislation. All comments received during the consultation exercise will be reviewed thoroughly and if accepted, will be incorporated in the Bill for introduction in Parliament.

PERIOD OF CONSULTATION

9. The draft Income Tax (Amendment No. 2) Bill 2016 is available for public consultation from 1 to 18 March 2016.  We regret that comments received after 18 March 2016 will not be considered as they will not be in time for incorporation in the Bill.

FEEDBACK CHANNEL

10. We encourage all interested participants to submit your comments via our online submission form.The online submission form is the easiest and quickest way for your comments to reach us.  You can also send us your comments, using the prescribed template , via:
a. email: pc_itabill@mof.gov.sg ; or 
b. fax: 6337 4134; or
c. post: 

Ministry of Finance
100 High Street, #10-01
The Treasury
Singapore 179434
Attention: Tax Policy Directorate

SUMMARY OF RESPONSES

11. We will publish a summary of the main comments received on the Ministry of Finance’s website , together with our responses, by the end of April 2016.  The identities of respondents will not be disclosed in the summary.  

DOCUMENTS TO DOWNLOAD

12. For reference, please click here to download the relevant documents for this public consultation exercise.

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[1] AEOI refers to the regular exchange of information between jurisdictions for tax purposes, with the objective of detecting and deterring tax evasion by taxpayers.


[3] A CAA, which can be either a bilateral or multilateral agreement, specifies the information to be exchanged and deals with administrative arrangements such as the time and format of the information exchange.

[4] FATCA is a US law that requires Foreign Financial Institutions worldwide to report to US Internal Revenue Service information on bank accounts maintained by US Persons.  Singapore and the US signed a FATCA Model 1 IGA on 9 December 2014.

16 March 2016

Oxfam: New report reveals prominent role of tax havens for banks

The five banks investigated in today’s new study disclosed having 16 subsidiaries in the Cayman Islands alone – with no staff – from which they still declare €45 million in profits.

The study by Oxfam, CCFD-Terre Solidaire and Secours Catholique-Caritas shows that the “big five” French banks make a third of their international profits in tax havens –  close to €5 billion – even though they pay only a fifth of their taxes to these jurisdictions (€825 million).

The report also highlights that subsidiaries in tax havens are on the average 60% more lucrative for banks than those elsewhere. For every €1000 of turnover, for example, Société Générale declares profits of €557 in tax havens – compared to €144 of profits declared in other countries - just €34 in France itself.

Oxfam’s analysis further reveals that the banks’ most risky and speculative activities, such as portfolio management or structured finance instruments based on derivatives are almost always located in tax havens.

A two-year-old EU law now requires banks to disclose basic information on their activities and the taxes they pay within each country they operate. France is the first to have translated this provision into national law.

The report “Following the Money: French Banks' Activities in Tax Havens” uses this data to analyse international activities of the five largest banks in France – BNP Paribas, BPCE, Société Générale, Crédit Agricole, and Crédit Mutuel - CIC.

The report highlights the disconnection between profits and taxes, and the role tax havens play for companies in avoiding higher tax bills, for example:
  • The five banks investigated declare a third of their international profits in tax havens (€4.907 billion out of a total of €15.349 billion), even though their business in these jurisdictions represents only a quarter of their international turnover (€13.540 billion of €53.054 billion), a fifth of their taxes paid (€825 million compared with €4.043 billion), and only a sixth of their staff (42,968 of 263,893).
  • “Profits per employee” is a clear indicator of how much money is channelled through tax havens, with employees working in tax havens appearing 2.6 times as “productive” to the banks as staff who are working elsewhere.
  • In 34 cases, banks have subsidiaries in offshore territories that have no staff at all. In the Cayman Islands, the five French banks disclose a total of 16 subsidiaries which generate €45 million in profits without a single employee..
  • The French banks concerned are paying half the effective rate of tax in these secrecy jurisdictions compared to the rates they are subjected to in other countries. In 19 cases, French banks even pay no tax at all in tax havens, although they declare profits there.

It was shocking to realise the sheer volume of money that banks are routing through tax havens to maximise their profits when we investigated this new data. We are sure that banks and big businesses in other European countries will be doing the same,” said Manon Aubry, advocacy adviser at Oxfam France.

"This is the first transparency exercise that can be conducted on the basis of data that has been made available and publically accessible thanks to new legislation. Although reporting is still not perfect, they reveal that public disclosure of basic business information is feasible and beneficial to better understand the activities of banks in tax havens. It is clearly a first step to fight tax dodging,” Aubry added.

Under current legislation, only banks are required to report on a country-by-country basis and make this information available to the public. This requirement must be extended to apply to all multinationals. Our parliaments, the press and all citizens have the right to know which companies are paying their fair share of tax. How many more tax scandals are necessary for EU governments to want to unmask aggressive tax planning strategies of multinationals?” said Lucie Watrinet, advocacy adviser at CCFD-Terre Solidaire.

The European Commission is currently considering legislation to extend public country-by-country reporting to all sectors, with a proposal to be announced in April. 

Citizens are tired of seeing how big companies abuse weak legislation to set up tricky accounting schemes and pay very little tax. Public services in both Europe and developing countries are lacking vital resources for services such as health care and education, while ordinary citizens carry a heavier tax burden. It is time for decisive EU action to stop this shameless trickery of large companies”, Watrinet added.

All eyes are now on the European Commission from whom we expect an ambitious proposal that pioneers real tax transparency. This includes clear rules for companies to break down their reported figures country by country on a global level to capture the full picture of their business in international tax havens. It is not sufficient to restrict these reports to subsidiaries in the EU, as the European Commission is currently expected to propose,” Aurore Chardonnet, EU policy adviser at Oxfam International, concluded.

Full report in English and French

Mulberry House Press - Lexicon of Trust & Foundation Practice

Editor John Graham Goldsworth, using material accumulated over 25 years in the trust industry, has made the publication of the Lexicon of Trust and Foundation Practice the essential support for trustees, trust advisers, private bankers, insurers, estate practitioners and all those who need to know the meanings and importance of words and expressions concerned with trusts, private foundations and asset planning vehicles.

Explanations are also given on a variety of other legal disciplines concerned with succession, land law, taxation and double tax treaties, international tax avoidance, corporate affairs, anti-money laundering, finance, conflict of laws, the recognition and enforcement of trusts, international litigation, banking and insurance and on the law of property generally – insofar as they are essential to advising on asset planning.

The Lexicon also contains a short glossary of relevant Islamic terms.

The Lexicon of Trust & Foundation Practice comprises 400 pages of selected entries which enable the student and practitioner to understand important aspects of branches of the law which arise in negotiation with clients and other professionals.


15 March 2016

OIL - 2015 Offshore 2020: The New Normal

In our business – the formation and ongoing management of offshore companies for cross-border investment and trade – the market had been robust for many years.


As the industry leader, we are keen to bring a broader perspective to the developments and identify key trends and issues the industry are facing. Most important is to understand how the offshore industry is likely to evolve in the coming decade. This desire to examine the bigger picture was the main impulse behind our "Offshore 2020" annual market research study.

We have produced the "Offshore 2020" annual market report since 2010.

This is our 6th year into the research, and same as previous years, we have launched the report with a series of roundtables in Taiwan, Shanghai, Beijing, Singapore, Hong Kong, Dubai and London.

Le subterfuge de l’Etat

Alors qu’en septembre 2015, le ministre Bhadain annonçait en grande pompe l’enthousiasme de la Prudential PLC, géant mondial des assurances, à investir incessamment au sein de la National Insurance Company (NIC), il s’avère que les représentants de l’Etat se démènent pour mobiliser MUR 2, 5 milliards afin de sauver les meubles.

Mauritius: FSC Communiqué - Signature of MoU with FSA Seychelles

The Financial Services Authority (FSA) Seychelles and the Financial Services Commission, Mauritius (FSC Mauritius) entered into a Memorandum of Understanding (MoU) on 03 March 2016 regarding Mutual Assistance and Exchange of Information. The MoU was signed by Ms Jennifer Morel, Chief Executive of FSA Seychelles and Mr Dharam Dev Manraj, Chairperson of the FSC Mauritius


Mauritius: AfrAsia Bank Career Opportunities

  1. Intermediate Accountant
  2. Reporting Specialist - Regulatory
  3. Product Manager - Cards
  4. Reporting Finance Officer
  5. Senior Legal Officer
Send your CV & motivational letter to recruitment@afrasiabank.com

14 March 2016

Ending the Era of Tax Havens: Why the UK government must lead the way

The gap between the rich and the rest is growing. Tax havens are at the heart of the inequality crisis, enabling corporations and wealthy individuals to dodge paying their fair share of tax. This prevents states from funding vital public services and combating poverty and inequality, with especially damaging effects for developing countries. The UK heads the world’s biggest financial secrecy network, spanning its Crown Dependencies and Overseas Territories and centred on the City of London – but this in fact provides an unparalleled opportunity to help end the era of tax havens. As the UK Prime Minister prepares to host the anti-corruption summit in May, this briefing paper outlines how tax havens fuel the inequality crisis which leaves poor countries without the funds they need, the UK’s role in the global tax haven system, and what the government can do about it.


Sunday Times: Ponzi-like is not Ponzi

Puisque le rapport nTan a glacé le sang du gouverneur de la Banque de Maurice et a été sanctifié par Roshi Bhadain et ses suppôts, intéressons-nous au mot composé Ponzi-like’, utilisé dans ce même document pour qualifier les activités de la BAI. Entre être et sembler être, il y a une différence. Etre, c’est confirmatif. L’exactitude, la certitude. Sembler être, c’est l’imprécision. On n’est pas sûr, on entretient un doute. Ça peut être une tromperie donc. Qui est comme un chien n’est pas un chien.

Bank of Mauritius Public Notice: Duty of Confidentiality imposed under the Banking Act 2004

  1. Members of the public are hereby informed that directors and employees of financial institutions regulated by the Bank of Mauritius (‘Bank’) are proscribed under section 64 of the Banking Act 2004 (‘Act’) from disclosing information relating to the affairs of any of their customers including any deposits, borrowings or transactions or other personal, financial or business affairs, without the consent of the customer or his personal representative.
  2. In order to preserve confidence in the banking sector as well as to ward off potential legal and regulatory risks, it is imperative that confidentiality be maintained in the banking sector.
  3. Disclosure of confidential information constitutes a breach of section 64 of the Act and is a criminal offence which, on conviction, may entail a fine not exceeding one million rupees and to imprisonment for a term not exceeding 5 years.

12 March 2016

Dawood Rawat, Chairman Emeritus, BAI : Un génocide économique est en cours

Dans son ouvrage, “Mythe de Sisyphe”, le philosophe Albert Camus disait “Créer, c’est vivre deux fois”. Mais à entendre notre invité de ce mois, la rapacité des autres pour ses créations, a fait de lui, un homme meurtri et proie de certaines vérités. Selon ses dires, le 3 avril 2015, c’était l’assaut final d’une guerre qui aura duré 45 ans. Malgré cela, on découvre un homme implacable, calme et loin de cette étiquette de Don Corleone que lui accordent des médias schizophrènes


11 March 2016

Mauritius IFC :Financial Services Promotion Agency (FSPA) / Financial Services Institute (FSI) - Vacancies

The Financial Services Promotion Agency (FSPA) is setting up a capacity building arm, to be registered as the Financial Services Institute (FSI) to provide competency-based training for professionals in the financial services industry.


Mauritius: Why is the viability of the Maubank being relegated to the background?

Yacoob Ramtoola of BDO, the Special Administrator of the now defunct British American Insurance Co (BAI) appointed by the Financial Services Commission, asked that the assets of the former Bramer Banking Corporation Ltd, be transferred in favour of the newly created National Property Fund which he is administering. His objective is to collect those banking assets to pay back certain insurance policy holders of the ex-BAI and investors into the now defunct Bramer Asset Management Ltd which fall under his charge. It is the job of such administrators to look out for funds from whichever source they can to bridge their financing gaps.

Excerpts:

The government, it appears, has guaranteed the repayment of depositors’ money of the ex-Bramer Bank and the former MPCB in the new incarnation, the Maubank. It has thus taken on the moral hazard of finding the funds from the Treasury to the extent existing assets of the two merged banks were still insufficient to meet their obligations vis-à-vis depositors. That would normally imply that the depositors will get back their money from the taxpayers’ exchequer no matter whether the assets previously acquired by the ex-Bramer Bank using depositors’ money finally fetch less than what they are valued at due to their further impairment. Now, part of those assets are likely to be taken away by the Special Administrator, increasing the government’s moral hazard…

Will not the ex-Bramer Bank (part of the Maubank now) become an emptier shell deprived of the assets taken away by the ex-BAI Special Administrator to meet liabilities not in any manner connected with or incurred by it? The Maubank being now deprived of those banking assets, will not the Ministry of Finance have to replenish the Maubank with an even larger amount of taxpayers’ money, due to the aggravated deficit in its finances caused by the removal of its assets by the ex-BAI Special Administrator?

Mauritius Times

10 March 2016

IMF, Policymakers, and Academics, Debate the Future of Monetary Integration in Sub-Saharan Africa

The Africa Training Institute (ATI), the IMF, and the Banque de France jointly organized a high-level seminar at the ATI in Mauritius on March 7–8, 2016. Over 30 high-level policymakers from across sub-Saharan Africa and academics from Africa, America, and Europe gathered to discuss the future of currency areas, with a focus on conditions under which they remain an appropriate mechanism for improving welfare in their member countries.

In their opening remarks, IMF Deputy Managing Director Carla Grasso and Institute for Capacity Development Director Sharmini Coorey underlined the timeliness of this seminar. Monetary integration is arguably one of the most pressing macroeconomic policy questions of our times, with urgent questions regarding governance and design of the Euro area on the one hand, and enthusiasm for further monetary integration in Africa on the other.

Participants’ views converged on the prerequisites for monetary integration such as more trade and economic integration. The exposure of potential monetary union members to large asymmetric shocks and the risks associated with large current account imbalances were recognized as sources of concern. Some participants noted that while monetary unions—such as the CFA zone—have contributed to price stability, there are more gains to be achieved on growth and economic development from trade integration, than perhaps from monetary integration. They discussed whether Africa should focus more on those integration objectives.

A panel that focused on the need to develop capacity before starting regional integration agreed on the need for better infrastructure development in all sectors—both physical and IT—as well as for strengthened human resources as prerequisites for reaping the benefits of any form of regional integration.

In the second ATI Presidential Lecture, Dr. Carlos Lopes, Executive Secretary, UN Economic Commission for Africa, made a strong appeal to African leaders to deliver on their agreed upon strategy of industrialization in Africa as a prerequisite for a successful regional integration. He noted the priorities of investing in infrastructure and the development of both human resources and institutions. He argued that, while Africa is late in the industrialization race, some factors play in its favor going forward. These include the continent’s large internal market, the declining cost of fossil fuel energy and large potential for renewable energy, low labor costs, and the large gains in employment that could be realized from even a modest increase in the value chain produced within Africa given the low current level.

Several participants were skeptical about the gains from fiscal unions at this stage, as a complement to monetary unions, given that many countries do not feel ready to give up political sovereignty, which comes with the implementation of a fiscal union. However, with a single monetary policy, fiscal rules are necessary to avoid the free rider problem even in the absence of a deficit monetization risk.

Asymmetric shocks in a monetary union can be significant given the economic structure of many African countries as commodity exporters. Here, several speakers emphasized that the rich literature on optimum currency areas can be a valuable reference, as it discusses mitigating factors such as factor mobility, diversification, financial integration, and fiscal mechanisms in the face of such asymmetric shocks. However, making such mitigating factors require structural reform.

The seminar concluded that monetary integration should not be pursued too fast and that priority should be given to implementing a comprehensive structural reform agenda as it emerged from the discussion.

09 March 2016

LexisNexis® Guide to FATCA Compliance (4th ed., 2016)

The LexisNexis® Guide to FATCA Compliance provides a framework for meaningful interactions among enterprise stakeholders, and between the FATCA Compliance Officer and the FATCA advisors/vendors. Analysis of the complicated regulations, recognition of overlapping complex regime and intergovernmental agreement requirements (e.g. FATCA, Qualified Intermediary, source withholding, national and international information exchange, European Union tax information exchange, information confidentiality laws, money laundering prevention, risk management, and the application of an IGA) is balanced with substantive analysis and descriptive examples. The contributors hail from several countries and an offshore financial center and include attorneys, accountants, information technology engineers, and risk managers from large, medium and small firms and from large financial institutions. Thus, the challenges of the FATCA Compliance Officer are approached from several perspectives and contextual backgrounds.

Several new contributing authors joined the FATCA Expert Contributor team this fourth edition. This fourth edition has been expanded by 19 new chapters and from a total of 54 to 73 chapters, with over 500 new pages of regulatory and compliance analysis based upon industry feedback of internal challenges with systems implementation. The previous 54 chapters have been substantially updated and expanded, including many more practical examples to assist a compliance officer contextualize the regulations, IGA provisions, and national rules enacted pursuant to an IGA. The new chapters include by example an in-depth analysis of designing a FATCA internal policy that is compliant with the initial two year soft enforcement initiative, designing an equivalent form to the W-8, reporting accounts, reporting payments, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, insights as to the application of FATCA and the IGAs within new BRIC and European country chapters, and a project management schedule for the compliance officer.

This fourth edition will provide the financial enterprise's FATCA compliance officer the tools for developing and maintaining a best practices compliance strategy, starting with determining what information is needed for planning the meetings with outside FATCA experts. This Guide may be leveraged in combination with the tools for identification of U.S. indicia of LexisNexis Risk Solutions.

Mauritius: The DTAA Conundrum

There was a two-day visit by an Indian delegation of officials this week concerning the Double Tax Avoidance Agreement (DTAA) between the two countries which exists since 1983. The objective apparently was to get the Mauritian side to sign off certain agreements that were reached by a delegation of Mauritian officials in July last year having overturning effects on the very substance of the treaty between the two countries, to our detriment.

08 March 2016

Celebrating Women at ALN | A Journey Shared

This International Women’s Day, the women at ALN share stories of their journeys with the hope that they will encourage other women in the pursuit of their full potential. We celebrate these women and trust that you will join us in learning from their experiences.


Offshore Pilot Quarterly (March 2016, Volume 19 Number 1)

Muslims, Policemen and Silent Dogs

This quarter’s newsletter contains extracts from a speech the main theme being blacklists and politics which I gave in March at the Fifth Annual Offshore Investment conference held here in Panama at the Hilton.

Blacklists, whatever their purpose, which are based on bias are dangerous. Their construction needs to be carefully thought out because they also create prejudice and excessive caution which, in turn, where financial services are involved, can increase compliance requirements and obstruct the flow of business. Let’s first look at prejudice, which feeds on perception, often fuelled by blacklists that target countries providing financial services, the subject most readers are interested in.

Just as a section of society will quickly associate Muslims with mayhem, so a larger sector in my view associates offshore business practices with misdeeds. It follows that for offshore centres themselves, being on a blacklist comes as no surprise – whether it’s justified or not – and, of course, as a consequence of this, excessive caution shadows the banks and other financial institutions dealing with offshore centres. The fear of swingeing regulatory fines, or worse, has compounded their apprehension. Already the Financial Action Task Force, an inspiration of the Organisation for Economic Co-operation and Development, has admonished some banks’ de-risking policy, cautioning institutions against placing a virtual ban on politically exposed persons as customers, reminding them that acceptance should be based on exercising judgement. The FATF has defined de-risking as the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk in line with the FATF’s risk-based approach.

Another problem is that the United States of America’s combative justice system does not help to make either US banks or foreign ones operating there feel comfortable. We have the case of 45-year old Caledonian Bank in the Cayman Islands which was ruined and is now in liquidation following a US Securities and Exchange Commission investigation. Based on the specifics of the case, the US judge asked the SEC lawyer how the commission could think that it was “entitled” to freeze money that belongs to the bank’s depositors, rather than the bank, and was told that the issue was not discussed during the preliminary proceedings.
“The bank collapsed because of your actions, didn’t it? Judge Pauley asked.
“Yes, your Honor,” came the reply.
“It’s stunning. It’s incredible government overreach.” The judge concluded.
A spokesperson for Caledonian’s former management said: “We are pleased to see that some of the truth is starting to be revealed. Unfortunately, it does not look like justice will ever truly be served in this case. Our business has been destroyed and the careers and lives of the people that made Caledonian great have been forever changed”. I am especially aware of the bank’s plight for the deleterious effect it had on a client’s business, despite being an innocent party.

Last April an American court dismissed charges against two Ukranians in a case in which the only American link was the tangential involvement of a federal agency. The flimsiness of the link led the judge to throw it out and said it had been a deeply misguided attempt to turn America into the world’s policeman. In the West only one country’s leader is frequently referred to as Commander-in-Chief; well, with the brand of justice just mentioned, its Attorney General could be referred to as Demander-in-Chief. When one considers the many instances of legal high handedness it is perhaps unfortunate that the present incumbent bears the surname Lynch.

Whatever issues or criticisms one may have concerning FATCA, the OECD’s Common Reporting Standard presents a much greater challenge and as with FATCA, the onus of collecting, collating and reporting information will fall upon the shoulders of financial institutions. Unlike FATCA, however, there are no minimum monetary thresholds and one cannot avoid the obligations. Reporting volumes will increase considerably and will result in stricter account opening requirements.

CRS is fertile ground for blacklists and it will be a game changer. A very careful analysis by service providers will be needed, the key to which will be entitlement and control of the income-bearing assets being reported. The US has no plans to participate but you will not find it on a future blacklist, I am sure of that. If ever an illustration of blacklists and politics was needed, you could not find a better example. The US argues that its FATCA legislation is sufficient. Critics argue otherwise and say that it leaves gaps in the transparency fence that allow a horse and carriage to be driven through; Tax Justice Network reckons that the US is now the third most secretive jurisdiction when it comes to corporate camouflage. Its absence from CRS reporting is unexpected, just like the dog that didn’t bark in the night.

Non-US tax payers can place funds in US entities that use US local banks and circumvent CRS. Oh, and yes, if corporate cover is needed, any corporation should also be formed in one of three or four US states which require no details of ownership. Roderick Balfour, co-founder of Virtus Trust in the Channel Islands, speaks of people moving trusts to the US to get away from CRS. He says: “it’s a huge hole in the bath for the water to go out of.” It doesn’t get better than this and the US deserves an Oscar in tax evasion facilitation; this suggests that CRS has a double meaning: Can Remain Secret. In this instance the US, once again, not only rules the waves, but waives the rules. It should be at the forefront of CRS and in this instance the “indispensable nation” is the “indefensible nation”.

CRS requires the collection and exchange of international financial accounts of taxpayers, but goes far beyond bank or custodial accounts and life insurance policies. It will include:
  1. Shares in international companies – and loans to them, owned directly or indirectly by the taxpayer.
  2. Trusts where the taxpayer is the settlor or beneficiary or to which he has made loans. This will apply to foundations in some instances.
  3. The financial accounts of certain trusts, foundations or companies where the taxpayer is a controlling person, including as a settlor or founder, beneficiary or protector.
This is accompanied by full details of the taxpayer (tax residence, tax ID number and place of birth), of the financial institution filing the report, and the account details, including the account balance or value at the end of the year, movement on the account and when an account is closed. The impact on offshore centres, in relation to both cost and time, is immeasurable at this point, but as one commentator has observed “CRS will clog and may harm this essential mechanism” which is central to so many international business transactions.

Shell Shock

As if all these developments were not enough to absorb and confront, the OECD’s project known as BEPS (Base Erosion and Profit Shifting) is rapidly taking shape. We first saw the issue of corporate inversion (moving operations offshore) come up on the US political agenda back in 2002. Since that time several high-profile businesses have transferred their domicile and management from the US to places such as Bermuda, Barbados and other international financial centres which has proven to be very controversial at both the US Federal and State level as tax revenues are at stake.

The problem is that today the international nature of business can touch upon the tax system of any one or more of some 200 jurisdictions worldwide. Inevitably, any jurisdiction could be a tax haven in the eyes of another simply by accident rather than design. Through a mismatching of US and Irish rules on tax residency Apple accumulated over $30 billion profit through legal entities which were, in fact, tax resident nowhere. To counter this, in 2013 the OECD produced an action plan to tackle the problem and last October it produced its final BEPS package. This came after extensive consultations with governments, regional tax organisations, NGOs and business associations. 60 countries were involved and businesses, including NGOs, contributed over 12,000 pages of comments on the 23 discussion drafts published and discussed at 11 public consultations.

The OECD Secretary-General said that the Action Plan “marks a turning point in the history of international tax co-operation”. That said, we have already suffered the Great Recession and now we are likely to experience the Great Regression as we see the potential for global conflicts concerning taxes; rather than improving co-operation, I can see barriers being erected and the opposite of international tax co-operation could prove to be the outcome, particularly in respect of corporations; both the UK and the EU could be on a collision course with the US over BEPS. BEPS could become a battlefield. New minimum standards on country-by-country reporting are to be put in place which will impact on treaty shopping and put an end to the use of shell companies which have no substance but through which investments are channelled. A century after the First World War term was coined, corporations, and not soldiers, are going to suffer from shell shock, albeit a different kind.

The OECD has said that it knows that jurisdictions are unlikely to move to implement the recommendations all at the same time. Unlikely? About as likely as President Obama holding a birthday party at the White House for Bashar al-Assad. Nonetheless, the OECD says that it has put together a flexible package, which contains minimum standards, and the G-20’s finance ministers endorsed the final package at their meeting in Peru last October. They stressed that the OECD must prepare an inclusive monitoring framework as early as possible during this year.

So a BEPS blacklist is on the horizon and the criteria for blacklisting will be according to the OECD’s definition, of course. One commentator has said it will repaint the tax landscape globally. And just like CRS, there are those jurisdictions that are eager to be early supporters of the project. Australia, for example, has adopted some measures even before the final recommendations became known. On the other hand, just like CRS, there are those jurisdictions who welcome this move as enthusiastically as some Americans would want a President Donald Trump in charge of foreign policy.

Dancing with Bees

In the case of both BEPS and CRS the one non-participating country that sticks out like the pope at a rave party is the US. The comments of senior US government officials and members of Congress are interesting and hardly endorse the BEPS objective. The US government, unfortunately, will be reliant on Congress when the time comes – if it ever does – to implement BEPS. Forget a blacklist; the US represents a black hole and I suspect that Jack Lew, the US Secretary of Treasury, whose comments have been vague, has deliberately taken a leaf out of the book of Kingman Brewster, Jr. the late academic and diplomat who said: “If I can take refuge in ambiguity I can assure you that it is quite conscious”. Why not put the US on a BEPS rainbow list? There’s no clear defining colour to it and full compliance will be somewhere, sometime, over that rainbow of Dorothy’s.

Transfer – pricing documentation and country-by-country reporting for the purposes of BEPS produces a wide range of information. The OECD recommends a three-tiered approach to compilation of data consisting of a master file, a local file, plus the country-by-country reports and just a single breach in only one country could expose the data (this has equal application in regards to CRS). OECD assurances are hollow as they don’t control access to the information, whereas we have been confronted with a long history of leaks of tax payer files due to inadequate safeguards; officials have even released information to attack political opponents; the US is not immune from that. According to the US Treasury Inspector General for Tax Administration, 1.6 million Americans were victimised by identity theft in the first half of 2014, up from 271,000 in 2010.

And as disconcerting as the US situation is, many other nations are far more vulnerable. Governments, for the first time in many instances, will have greater oversight of the balance sheets of tax payers, and this extends to trusts, foundations and companies. The data mining opportunities are considerable as is the vulnerability of taxpayers; perhaps some governments will be able to develop new taxation strategies targeting new sources of tax. As I have said before, a mine of information for governments, but a minefield for the public. Wikileaks, for certain, could well prove to be the bellwether for future disclosures of confidential information, the consequences of which could vary according to the individual; it’s possible that basic human rights or freedoms could be prejudiced.

Doubtless the momentum building against tax dodgers – particularly corporate ones – will continue. The good ship America, the West’s economic leader, whose dominance rose from the ashes of Europe’s wars in the first half of the last century, has now entered troubled financial waters; it will need more than Simon and Garfunkel to build a bridge over them. If Europe was strong, this would be a counterbalance, but it is not. And further afield there does not seem to be one big economy displaying the confidence and providing that strong economic alternative found in previous global downturns; China, for example, is concentrating on domestic development so this makes the malaise different this time, with perhaps India one beacon of hope.

In closing, let me return to the hydra-headed subject of regulation. Those of you visiting Panama will see on the Cinta Costera along the city’s seafront the number of people jogging, running and cycling. Exercise is a very popular worldwide pastime; unfortunately, exercising judgement by bureaucrats, banks and their compliance departments is not. As regulations and controls mount, many offshore financial services providers might hear buzzing in their ears in line with a remark made by Australian comedian, Tim Ferguson: “Just remember, life is not a race, it’s a dance, a dance in a room slowly filling with bees”.

Offshore Pilot Quarterly (independent writing for independent thinkers) has been published since 1997 by Trust Services, S. A. and is written by Derek Sambrook