Offshore financial centres offer more than tax benefits

Delegates at the 10th annual OffshoreAlert Conference will hear it is a misconception that offshore financial centres are used solely to avoid or evade taxes.  

British Virgin Islands-based Appleby attorneys Michael Burns and James McConvill are set to outline the practical reasons why OFCs are used in international business and highlight “that the use of OFCs is not just tax-driven” in one of the 25 sessions at the event. 

The Offshore Alert Conference, aimed at buyers, providers and investigators of financial products and services, will take place at The Ritz-Carlton, South Beach in Miami Beach, Florida from 29 April to 1 May. 

The independent forum will discuss “everything that’s significant in international finance”, including the use of OFCs by the world’s biggest corporations and high net worth individuals to minimise risk and maximise protection, according to the organisers. “High net worth individuals and the world’s biggest corporations routinely use OFCs for a variety of reasons,” said OffshoreAlert publisher David Marchant. “Speakers at our conference will explain how and why this is done.” 

The event features more than 50 expert speakers including offshore judges, international legal and tax experts, and investigators of serious financial crime, such as senior personnel from the Internal Revenue Services, the Securities and Exchange Commission and the Commodity Futures Trading Commission in the United States. 

Tim Ridley, former chairman of the Cayman Islands Monetary Authority, will argue that rather than offshore financial centres, “irresponsible” governments, regulators and banks are mainly responsible for the global recession. 

“It is a myth that OFCs are primarily responsible for the recent financial meltdowns,” he said. “The harsh reality is that the US meltdown resulted from an alliance between the politicians, the regulators and the banks to provide cheap housing loans to those who could never pay the loans back; and, in Europe the meltdown resulted from the irresponsible policies of governments who believed that a cradle to grave welfare system could be provided forever on borrowed money.” 

Although “the pendulum is still swinging against OFCs for the moment”, Mr Ridley said, “for the most part OFCs have dodged the misdirected bullet that ‘offshore’ was responsible for the meltdown”. 

In Cayman, the hedge fund industry is re-energised and is growing again, Asian IPOs are doing well and captive insurance is hanging in, he said. “But the debt side (securitisation) is still quiet, albeit with some green shoots, the banking and trust sector is essentially flat and, overall, the recovery in OFCs has been patchy.” 

Mr. Ridley will speak about the role that OFCs play in the global economy and that “success will come to those jurisdictions that can genuinely add value to international transactions and are recognised as so doing”. Other highlights at the conference will see judges Ian Kawaley from the Bermuda Supreme Court, Edward Bannister, of the BVI High Court, and Charles Quin, of the Grand Court of the Cayman Islands, discuss key rulings and judicial issues affecting foreign individuals and businesses.  

Speakers from the IRS will include those who are at the forefront of the ongoing investigation into Swiss banks for their alleged involvement in helping US taxpayers commit tax evasion. 

Other featured speakers are Jeffrey Owens, head of tax at the OECD in France, who will examine the mechanisms for tax information exchange and how the organisation’s peer review process has been carried out so far, and Dan Reeves who, since 2003, has been the lead investigator for the IRS’ Offshore Credit Card Project, Offshore Private Banking Initiative and other offshore compliance initiatives. 

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Tim Ridley, centre, pictured with Jack Blum, left, and Avinash Persaud, right, at last year’s Offshore Alert Conference will be one of the speakers 2012. – Photo: File

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