Doyle A. Dally, Senior Manager - Trust Department Head
Globalisation, at one time only a fleeting wish, is here with us and is by no means a passing fad. It represents a level of international maturity which has been a desired objective of all those who realised that certain economies could best be achieved in an environment where there is cross-border unanimity. So often, we hear world leaders refer to our world as a global village and to the fact that, for a number of reasons, international borders and boundaries are fading imperceptibly into each other. Indeed, there are bilateral agreements, mutual legal assistance treaties, tax and information exchange agreements and a host of other agreements, between the major industrial and developing countries of the world.
While this is a notable accomplishment, in some ways it is not such a good thing for those, so-called, offshore financial centres that benefit from capital flight and banking secrecy, and may well be sounding the death knell for certain segments of this industry. As governments join various multi-national organisations and enter into various conventions, there has been a noticeably marked increase in the level of intergovernmental cooperation and mutual assistance.
Recently enacted legislation in the United States, Canada and the UK all seem to have a common thread, which is unlikely to be purely fortuitous, and targets the "Bread and Butter" of the offshore financial communities, namely, the trust and private client business.
The perception of those who would tend to use the offshore marketplace for legitimate exercises is understandably such that established jurisdictions, such as Bermuda, Cayman Islands, Bahamas and BVI, are destined to suffer some fall-out. It is, therefore, to be expected, that some of the lesser known and lesser regulated jurisdictions will see this as an opportunity to offer their services to an increasingly ambivalent clientele who have weathered prohibitive legislation in the past and will no doubt adapt to the new environment along with those new participants, many of whom seem not too inclined to use regulated jurisdictions.
Capital, it is said, tends to flow to wherever it generates its best return and there will always be entrepreneurs to provide an environment in which this can be accomplished. Therefore, it is perhaps, naive to expect that there will be more than a temporary lull in the flight of Capital, however, the same cannot be said for Banking secrecy which seems destined to become a thing of the past. Despite the foregoing, globalisation should encourage a better understanding of the offshore marketplace, hopefully, dispelling the long held myths and paving the way for a more respectable long term existence as a necessary part of the global financial engine.
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