Offshore jurisdictions asked to embrace transparency
In a world of data breaches and political unrest, the concept of confidentiality faces a certain death, warned British Virgin Islands lawyer Tim Prudhoe on Tuesday.
Rather than fear the future, the Kobre & Kim partner advised offshore tax jurisdictions to embrace transparency and find benefit in a turbulent world.
“There are lots of people wanting to plan their assets. We are just as well placed as others to take advantage of that heightened anxiety,” Mr. Prudhoe said during the 2017 STEP Caribbean Conference at the Kimpton Seafire Resort.
The Society of Trust and Estate Practitioners event gathered business professionals from across the region for three days of discussion on tax policy, asset protection and information exchange.
On day two of the event, Mr. Prudhoe described a “veritable crusade for transparency,” muddled by misinformation and public perception.
Despite headline-grabbing leaks like the Panama Papers, Mr. Prudhoe argued that public relations disasters are the least of the financial industry’s worries. He pointed out that while the leak captured public attention, it resulted in very little litigation.
The case did, however, indicate significant public interest in tax transparency.
To stay competitive in the marketplace, he encouraged offshore jurisdictions to embrace the push toward openness. Given the global abundance of tax options, he warned that non-transparent jurisdictions risk losing their competitive edge.
He said privacy in an absolute sense can no longer be expected and is no longer a selling point. He pointed to a recent survey in which 77 percent of those polled expected a network of tax information exchange agreements to be established by 2020.
“One way or another, there is going to be information exchange,” he said.
He also warned that clever lawyers will not be the ones to save the day. Jurisdictions that rely on such individuals risk perpetuating the image created by John Grisham’s legal thriller, “The Firm,” he said. Sophisticated legal frameworks should instead serve as backup for above-board policies.
For those who embrace change, he said opportunity awaits.
“There is a great deal to be optimistic about as long as we don’t spend too much of our time worrying about people picking on us,” he said.
For attendees who may have been unsettled by Mr. Prudhoe’s outlook, speaker Conrad Griffiths of Griffiths & Partners focused his presentation on balancing information exchange with privacy rights. He outlined legal avenues to protect client confidentially and to challenge possible violations.
Other topics covered during the three-day event included global banking issues, the rights of foreign trustees in U.S. courts, and regional considerations for Latin America, Asia and the Caribbean.
Wednesday is the final day of the conference and will include breakout sessions on dispute arbitration, Brexit, and investment funds.
The STEP Caribbean Conference has been held for 20 years in countries across the region. Upcoming STEP conferences will be held in California, Canada, Israel, Scotland and Australia, among other locations.