Offfshore financial centres (OFCs) have taken a bashing in the press in the last few days following the Mossack Fonseca leaks.
But the truth is that the major OFCs are extremely well regulated and have been so for many years. It is far harder to set up a company in Jersey than in the UK, for instance, because of its rigorous “know your client” rules. It is therefore wrong to judge the whole of the offshore industry on the actions of a single firm in Panama. All the major OFCs comply with international rules on money laundering, tax information exchange and corporate governance.
In fact, most people use companies in OFCs for quite mundane, non-tax reasons. If you are trading or investing internationally, an offshore company is an essential building block for your business. One huge attraction is the excellent legal systems and experienced professionals in the legal, fiduciary and corporate governance sectors. Experienced business people will tell you that there are certain emerging markets where, under no circumstances, would you want to resolve an investors’ dispute – you would much rather resolve it in a Cayman court where you could be sure of a fair fight.
Bribing a Nigerian official was just “a cost of doing business”, the former financial director for Australian Reserve Bank subsidiary Securency has told a London court.
“At the time there was disappointment, but I agreed to proceed with it,” said David Ellery, who was Securency’s financial controller and company secretary until 2010. Mr Ellery also claimed that several other senior executives at Securency were aware of the alleged bribe. Ellery had agreed with police to reveal corrupt activity at Melbourne-based polymer banknote firm Securency International, in exchange for a prosecution deal which led to his avoiding jail. Mr Ellery was giving evidence at the trial of Peter Chapman, the former director of business development in Africa for the company.
Mr Chapman has pleaded not guilty to six corruption charges over alleged bribes in 2007, 2008 and 2009 to a Nigerian mint official who cannot be named for legal reasons. Mr Chapman arranged for hundreds of thousands of dollars to be transferred to the official through a web of offshore companies and accounts, the jury heard this week.
Mr Ellery said he was present at a meeting at Securency’s head office about their Nigerian operation, attended by Mr Chapman and several other senior Securency directors.
Banks around the world are realising that in the rapidly developing world of smartphones and apps they are at risk of falling behind in the innovation race.
Fresh-faced financial technology start-ups (fintechs) are coming up with new mobile-first services – payments, loans, money transfers, digital currencies – and threatening to steal customers, particularly younger ones. Investment bank Goldman Sachs estimates that $4.7tn (£3.3tn; €4.1tn) in revenue for traditional financial services is at risk of being displaced by these fintech upstarts. “From Amazon’s transformation of the retail sector, to Uber’s revolution in personal transportation, banks are taking heed of what is happening in other industries,” says Mohit Joshi, global head of financial services at tech consultancy, Infosys. “The biggest banking market challenge is coming not from challenger banks, but from fintech start-ups.”
This is why many old banks have been flirting with younger models in an effort to stay hip. But are such apparently mismatched relationships doomed to failure? At the southern tip of Africa, in Cape Town, global banking giant Barclays is busy developing a secret tech solution to make it easier for consumers to make payments online.
The World Bank yesterday met with operators in the solid minerals’ sector to discuss the possibility of further funding for the development of the sector. The Lead Director said the bank is a development partner to the government of Nigeria. He added that aside providing the ministry of solid mineral with a funding project which is to run for four years, the Bank will also provide technical assistance. He said the World bank recognises that the mining sector can be a driver of growth and has come to appreciate the sector’s governance which helps government to administer the sector and investors to realise their objectives and have the benefits for their investments.
Dr Kayode Fayemi revealed that his ministry had approached the Bank for funds for the development of the sector. Fayemi recalled that the first round of the fund to the sector was also supported by the World Bank in 2005-2012 as part of the sectors reform initiative, adding that the bank has been gracious enough to work with them in developing this initiative. He noted that the sector will not be developed overnight and urged the operators to be frank where they think there are gaps in the activities of the ministry.
The Vice President, Professor Yemi Osinbajo, has unveiled a detailed economic agenda that specifically tackles the nation’s current challenges. Osinbajo called on the Nigerian people to remain patient and indeed expectant, giving assurance that the Buhari administration is firmly committed to revamping the Nigerian economy and fulfilling its promises.
Acknowledging the pains currently facing the nation, Mr. Osinbajo said that they are working diligently to address the tough challenges inherited from the nation’s past. He said that the multitude of things requiring decisive action have to be strategically handled. He said that the Buhari administration will produce satisfying outcomes, because they are borne out of a leadership that has no other agenda but the progress and greatness of Nigeria. Osinbajo disclosed that the Federal Government’s blueprint would be based on a strategic implementation plan for the 2016 budget under six thematic key areas, adding that the plan, would focus on about 33 Priority Actions. He said that they remain committed to economic diversification through import substitution, and export promotion, in order to build a robust and resilient economy, as a lasting legacy for generations to come. He said there was need to engage with the Nigerian people, including stakeholders in the economy, and that stating that quarterly meetings will be held on ongoing basis.