The focus of international self regenerationists (UN, World Bank, OECD et al) is moving to corruption. These and their brethren agencies have well grazed the grasslands of narcotics, money laundering, terrorism and tax evasion. So to continue their existence, they need to find pastures new to feast on. Otherwise, they risk loss of funding, not to mention impairment of their juicy tax free benefits packages, health and pension plans. And adding corruption to the list of issues to be addressed by OFCs, has the added “benefit” of another (anti competitive) cost burden to be imposed on small OFCs, who are already suffering under the heavy compliance costs of meeting international standards, that have produced little progress in the fight against international crime and terrorism. This has much to do with the very patchy performance of the major onshore jurisdictions in implementing the very standards they demand of OFCs.

Enough of the tongue-in-cheek stuff. Corruption, particularly in the international context, has in recent years been moved up the agenda by the UNODC, the World Bank and the OECD. Countries that had been rather unenthusiastic in their commitment to attack corruption (particularly those with major arms, energy and mining companies who do business in less than transparent nations where standards of public propriety are less than stellar) have started to change and to implement their treaty obligations. Often as a result of major scandals and media focus. The USA has significantly ramped up prosecutions under the Foreign Corrupt Practices Act and with considerable success. The UK has been very slow to join the party (think BAE Systems and Saudi Arabia), but the Bribery Act has finally been brought into effect this year, to loud complaining by certain business interests (who worry whether taking clients to Wimbledon tennis is a criminal offence). And other major (Western) countries are also (slowly) moving forward.

Criminal activity is criminal activity and should be stopped and punished; and both in the international and local context. The perhaps unintended benefit to small OFCs, who are pressured to introduce modern legislation to assist in the fight against international corruption, is that the same regime can be used to go after local corruption. After all, an effective agency set up in an OFC to handle corruption matters can both assist in the pursuit of the financial proceeds arising from corruption overseas and also pursue corrupt local businessmen, public servants and politicians in the OFC itself.

So this is one initiative that can really help OFCs. The private and public sectors should take note and get behind the programme, rather than engage in the usual foot dragging.