Offshore Financial Centres and the Law
Suspect Wealth in British Overseas Territories
This book considers the ability of island jurisdictions with financial centres to meet the expectations of the international community in addressing the threats posed to themselves and others by their innocent (or otherwise) facilitation of the receipt of suspect wealth.
In the global financial architecture, British Overseas Territories are of material significance. Through their inalienable right to self-determination, many developed offshore financial centres to achieve sustainable economic development. Focusing on Bermuda, Turks and Caicos, and Anguilla, the book concerns suspect wealth emanating from financial crimes including corruption, money laundering and tax evasion, as well as controversial conduct like tax avoidance. This work considers the viability of international standards on suspect wealth in the context of the territories, how willing or able they are to comply with them, and how their financial centres can better prevent receipt of suspect wealth. While universalism is desirable in the modern approach to tackling suspect wealth, a one-size-fits-all approach is inappropriate for these jurisdictions. On critically evaluating their legislative and regulatory regimes, the book advances that they demonstrate willingness to comply with international standards. However, their abilities and levels of compliance vary. In acknowledging the facilitatively harmful role the territories can play, this work draws upon evidence of implication in transnational financial crime cases. Notwithstanding this, the book questions whether the degree of criticism that these offshore jurisdictions have encountered is warranted in light of apparent willingness to engage in the enactment and administration of internationally accepted laws and cooperate with international institutions.
Table of Contents
Chapter 1: Introduction and Conceptual Framework
Chapter 2: Concerns about Economic Crime and Suspect Wealth
Chapter 3: Offshore Financial Centres and the British Overseas Territories
Chapter 4: Bermuda
Chapter 5: The Turks and Caicos Islands
Chapter 6: Anguilla
Chapter 7: Privacy and Increasing Transparency: What does it mean for the future of offshore financial centres?
Chapter 8: Conclusion
Dominic Thomas-James is a Postdoctoral Research Associate at Fitzwilliam College, University of Cambridge and is a Global Justice Fellow at Yale University. He is a Course Director and Tutor in International Development and International Relations at the University of Cambridge Institute of Continuing Education, and is a Member of the Cambridge Centre for Criminal Justice. He earned his Ph.D. and M.Phil. from Queens’ College, University of Cambridge, and read law at King’s College London. He is a Secretariat Member of the Annual Cambridge International Symposium on Economic Crime at Jesus College, Cambridge. He regularly speaks at international conferences and forums and has served as a consultant to various inter-governmental and international organisations. He is a practising barrister, called to the Bar of England and Wales by the Inner Temple, and is a Door Tenant at Goldsmith Chambers, London.
The issue of small islands hosting big money has been much in the media and on the policy agenda of late, and nowhere more so than the UK Overseas Territories of the Caribbean. Yet for all the attention, perhaps even notoriety, these islands remain strangely unknown, often being lumped together as inter-changeable exotic tax havens. Eschewing lazy prejudice and stereotypes of tropical bolt-holes, Thomas-James’s book does what should have been done a long time ago but has not: it provides a thoroughly researched and nuanced picture of these islands’ presence and participation in the global financial industry, as well as their reactions to international regulatory campaigns to counter dirty money. Focusing on Bermuda, Anguilla and the Turks and Caicos Islands, Offshore Financial Centres and the Law provides an invaluable resource for those interested in the real story of offshore finance.
Professor Jason Sharman FBA, Sir Patrick Sheehy Professor of International Relations, and Head of the Department of Politics and International Studies, University of Cambridge; Fellow, King’s College, Cambridge; and Fellow, British Academy.
Dr. Dominic Thomas-James’ treatise takes a most interesting approach to the growing literature on anti-money laundering and anti-corruption. The text, which developed from an excellent doctoral dissertation at the University of Cambridge, tells the story from the perspective of the small jurisdiction attempting to meet the ever-increasing regulatory requirements of international conventions, and of dominant nations. By example, the FATF money laundering and terrorism financing Recommendations have acquired the status of global norms but are based on a one-size-fits-all approach. This simply does not work for all nations, particularly those who have, oftentimes through necessity, developed legitimate offshore financial sectors which now must be re-tooled to fit global norms. As the saying goes, failure is not an option, forcing small jurisdictions to either ‘toe the line’ or suffer the ignominy of being branded rogue nations. So, it is with the British Overseas Territories and this story that Dr. Thomas-James skillfully weaves in his timely and important work. I commend it to all who practice in this area.
Dr Peter German QC, President, International Centre for Criminal Law Reform and Criminal Justice Policy, Canada; and former Deputy Commissioner and Director of the Financial Crime Division, Royal Canadian Mounted Police.
With Covid-19 throwing the world’s economies into turmoil and with Britain, having Brexited the European Union, needing to strengthen its financial and economic ties with Commonwealth countries despite its reputation for being "the dirty money capital of Europe", this book could scarcely be more useful and timely. Dr Thomas-James throws new light on the working of British Overseas Territories as tax havens. This scholarly work examines how far international legal and regulatory standards are being achieved, where and to what extent there may be room for improvement, and what can be done to advance the reputations of the several countries concerned.
Sir Ivan Lawrence QC, Visiting Professor of Law, University of Buckingham and BPP University; Co-Chair, Cambridge International Symposium on Economic Crime; Barrister, and Master of the Bench, Inner Temple; former Member of Parliament and Chairman, Home Affairs Committee, House of Commons.
Dr Thomas-James presents an insightful and nuanced review of the complexities of anti-money laundering compliance in offshore jurisdictions. By focusing on three British Overseas Territories – Bermuda, Turks and Caicos, and Anguilla – he is able to demonstrate both the common issues facing many offshore financial centers as well as the particularized difficulties faced by discrete jurisdictions based on their economies, the specific financial activities they foster, and international expectations. The conclusion, that there is no "one-size-fits-all" solution, should be obvious, but unfortunately is not widely recognized. Calls for strict adherence to an American or British AML structure are doomed to failure as many offshore jurisdictions lack the capital and infrastructure to implement all of the changes mandated by such an approach. Instead, Dr Thomas-James recognizes the need for bespoke solutions to particular problems. Eschewing generalities and popularized myths about offshore jurisdictions, Dr Thomas-James focuses instead on facts and detailed analyses to offer real world solutions.
Mr Adam Kaufmann, Partner, Lewis, Baach, Kaufmann & Middlemiss PLLC, and former Executive Assistant District Attorney and Chief of the Investigations Division, New York District Attorney's Office.
The relationship between offshore financial centres and economic crime has always been controversial and particularly so in the context of the British Overseas Territories. Dr Thomas-James’s book provides a welcome, indispensable and balanced guide to understanding this complex relationship and the issues that surround it.
Mr Peter Lowe, Executive Secretary, International Chamber of Commerce FraudNet