New Pirates in the Caribbean
Think of the Caribbean and the images emerge – clear blue waters, linen-soft sands. And more history than you can shake a guide book at in this region's pirate-filled past. How about a pirate-filled present in the new disguises of dubious directors, shadowy shareholders, and hidden assets?
Anguilla, Barbados, the Caymans, the Bahamas and the British Virgin Islands may offer sunny vacations and easy living. However, the famous Panama Papers disclosure of 2015 exposed tens of thousands of offshore companies to scrutiny. It showed how these paradise islands also host shady firms used by the wealthy to evade taxes or even hide criminal activities. This is a different kind of "escape" than the glossy holiday brochures have in mind.
Offshore accounts add to the intrigue of the Caribbean islands and their attraction for the coyly rich. Such centers exist on all continents, but the Caribbean hosts a large cluster of them. Why so?
The rich history of the Caribbean's place in the offshore world has much to do with the shaky economies of these island nations. In the British Virgin Islands, 51.4 percent of government revenues come from company incorporation fees. Lacking natural resources or high-tech centers, the BVI government would have to rely on tourism to generate economic success. Instead, it mines a treasure trove of administrative fees by hosting offshore accounts.
It is the offshore companies that fuel the economic engines of many Caribbean islands. This makes it hard and impractical for their state legislatures to reign in or even regulate offshore-company recklessness. To penetrate the murky offshore world requires investigators or journalists to tap sources within these nations' company registries and offshore registering companies.
This tactic unleashed the Panama Papers. A whistleblower at Mossack Fonseca, a law firm and registering company in Panama, leaked tens of thousands of internal documents to the German journalist Bastian Obermayer and his colleagues at Suddeutsche Zeitung newspaper.
Unfortunately and for many reasons, legislatures across the world have done little to penetrate further the dangerous secrets lurking in offshore accounts that hide trillions of dollars. Until governments enact stringent new laws on a global scale, expert journalists, and rare whistleblowers willing to risk their livelihoods must fight alone in the battles for transparency and accountability.