1. Felicity Banks Head of Business Law Institute of Chartered Accountants in England & Wales Economic Crime, Reputation and the Competitive Position of the BVI

2. ICAEW Economic Crime Fraud Market manipulation Corruption Money laundering

3. ICAEW Reputation Factors in choosing a jurisdiction: Geography Infrastructure Human resources Legal environment Tax environment Reporting/disclosure obligations

4. ICAEW Reputation Factors in choosing a jurisdiction: Geography Infrastructure Human resources Legal environment Tax environment Reporting/disclosure obligations

5. ICAEW Reputation Reputational factors include: A safe and stable political, judicial and economic climate Good quality of life

6. ICAEW Economic Crime Fraud Market manipulation Corruption Money laundering (and terrorist financing)

7. ICAEW Money Laundering and Terrorist Financing The process by which criminals retain, disguise and conceal the proceeds of their crimes The process by which funds are raised, consolidated and retained for use in financing terrorism

8. ICAEW Economic Crime Predicate offences for Laundering: Drug trafficking Terrorism Corruption Tax evasion ?

9. ICAEW Economic Crime Tax evasion ? – Tax competition – Tax planning – Tax avoidance – Tax fraud Jurisdictional self interest? or tax justice?

10. ICAEW The Economic Climate Pressure on tax revenues Need for political justification Increased fear of instability

11. ICAEW The Economic Climate Need for political justification Pressure on tax revenues Increased fear of instability The first two of these will lead to continuation of the pressure towards tax transparency.

12. ICAEW The Economic Climate Need for political justification Pressure on tax revenues Increased fear of instability Can even Switzerland hold out?

13. ICAEW Economic Crime In addition, tax evasion can involve unexplained, otherwise uneconomic, transactions. Other remunerative crime can mimic it: – Drug trafficking – Corruption – Terrorism?

14. ICAEW Off-Shore Tools Stability – political, economic, fiscal, geo- political Fiscal – benign, simple, tax neutral structure Confidentiality – protective of clients interests Effective regulation and supervision Independent judiciary Good travel and communication

15. ICAEW Reputation Confidentiality – protection of clients interests

16. ICAEW Reputation Confidentiality – protection of clients interests How much of this is legitimate, and how much is it intended to conceal the proceeds of crime, including tax evasion?

17. ICAEW Reputation - Confidentiality Disclosure of beneficial ownership to bankers and advisors in other jurisdictions. Disclosure of suspect transactions or behaviour to law enforcement. Disclosure of taxable amounts to foreign tax collectors.

18. ICAEW Confidentiality – Suspicion Reporting Can a professional ethical position be reconciled with reporting money laundering suspicions? Can an open client relationship be maintained, where there is a legal requirement to report suspicions?

19. ICAEW Client Confidentiality Experience in the UK is that client relationships can be maintained – with care. The tipping-off provisions do not stop professionals from assisting clients to regularise their position.

20. ICAEW The UK Implementation In the UK, accountants in practice make around 600 money laundering suspicious activity report a month – Why is this so high? Is it a good thing?

21. ICAEW The UK Implementation It is high because of: A wide definition of Money Laundering Strong enforcement A belief that the information generated will be appropriately used, for the general good.

22. ICAEW The UK Implementation It is a good thing if and because: The belief that the information generated will be appropriately used, for the general good, is correct. The danger of future inappropriate use is remote.

23. ICAEW Competitiveness – The Global Financial Centres Index 1.London 2.New York 3.Singapore 4.Hong Kong 5.Zurich 6.Geneva 7.Frankfurt

24. ICAEW Competitiveness – The Global Financial Centres Index 12.Guernsey 13.Jersey 18.Isle of Man 22.Cayman Islands 33.Gibraltar 34.BVI 36.Bahamas 37.Monaco

25. ICAEW Competitiveness – The Global Financial Centres Index According to this survey: The reputation of smaller and less sophisticated jurisdictions has suffered worse than larger jurisdictions Panama and the Seychelles come nowhere.

26. ICAEW Reputation High reputation off-shore centres benefit from: 1.Professionalism, transparency and economic value added 2.Strong legislation and regulation 3.Enforcement and prosecution 4.Engagement Tax and confidentiality cannot be relied upon, in a future business model.

27. ICAEW MAJOR PLAYERS FATF/GAFI Financial Action Task Force – www.fatf-gafi.orgwww.fatf-gafi.org EUROPEAN UNION http://europa.eu.int/comm/internal_market/company/financial- crime/index_en.htm http://europa.eu.int/comm/internal_market/company/financial- crime/index_en.htm RESEARCH http://www.zyen.com/Activities/On-line_surveys/GFCI.htm SOURCES OF GUIDANCE www.icaew.co.uk/moneylaundering

28. Felicity Banks Head of Business Law Institute of Chartered Accountants in England & Wales Economic Crime, Reputation and the Competitive Position of the BVI