Resources
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Fiction Clouding Fact - A Comparative Review of Jersey’s Efforts to Counter Financial Crime
"The financial crisis began with the collapse of the structured investment vehicles, which accountants and lawyers working offshore put together"... "transparency and openness’ are ’virtues that the offshore banking industry hates with a passion."
The Observer, 14 December 2008
In this briefing, Stephen Platt counters, with empirical evidence, the misplaced but increasing hostility to offshore financial centres that has intensified as a result of the global financial crisis.
Based on an independent review carried out by BakerPlatt, designed to discover whether there are grounds for concern so far as offshore centres are concerned, it concentrates on compliance with international standards of financial regulation and anti money laundering procedures and on the mechanisms for exchanging information in tax related matters. It also considers whether the term ’offshore’, when intended to convey levels of compliance, regulation and co-operation, can meaningfully be applied to a diverse range of jurisdictions.
’Death by a Thousand Reviews?’
In November 2008, in their Pre-Budget Report, the British Government announced that they would be commissioning an independent Review of British financial offshore centres within the Crown Dependencies and Overseas Territories. In this briefing Stephen Platt, BakerPlatt Group Chairman, examines the possible motivation for such a review, and what its aims and parameters may be.
A summary of the latest caselaw effecting Jersey Financial Services Businesses, produced by BakerPlatt Partners and Senior Associates.
"Bank secrecy aggravates corruption and is corrosive to societies around the world."
Joseph Stiglitz, Winner - Nobel Prize for Economics in 2001, former Chief Economist - The World Bank
However, there are a high number of perfectly legitimate reasons why an individual would not want his financial affairs to be well known and seeking confidentiality should not be considered inherently suspicious. Jersey has never had, contrary to the belief held by some, banking secrecy enshrined in statute. It does have a statutory regime of data protection and client confidentiality is, of course, an important principle and fundamental to the relationship between banker and client.
In this briefing, Stephen Platt examines how achieving the right balance between, on the one hand fighting corruption and combating money laundering with, on the other, protecting the civil liberty that is the individuals right to privacy is a tough task.
The ’Stop Tax Haven Abuse’ Bill
"We lose $100Bn every year because corporations get to set up mailboxes offshore so that they can avoid paying a dime of taxes in America. Imagine if you got to do that......I will shut down those offshore tax havens and corporate loopholes as President, because you shouldn’t have to pay higher taxes because some big corporation cut corners to avoid paying theirs"
Barack Obama - 22nd September 2008
Tracking polls currently give Barack Obama a 10% lead over John McCain in the race for the White House. If he enters the White House then the ’Stop Tax Have Abuse’ Bill introduced by Senate Colleague Carl Levin and publicly supported by Mr Obama may gain unstoppable momentum.
In his briefing on this impending risk, Stephen Platt examines the Bill. and argues that it goes too far.
Offshore Tax Havens are ’Al Capone Safe Houses engaged in Economic Warefare against the US’ according to US Senators
The current investigation, ’Tax Haven Banks and US Tax Compliance’, being carried out by the US Senate Committee on Homeland Security & Governmental Affairs was seething with drama last week when, on 17th July 2008, UBS, Switzerland’s biggest bank and the world’s largest manager of private wealth, announced at a hearing before the committee that it would be withdrawing provision of offshore banking and security services to US residents.
BakerPlatt White Paper - EU White List Omits the Diamond for the Dirt A ’White Paper’ prepared by BakerPlatt which examines the exclusion of Jersey from the latest EU White List of Equivalent jurisdictions. The White Paper is based on our detailed analysis of the compliance of those countries with international standards that made the EU White List. Our analysis is being utilised by the Society of Trust and Estate Practitioners (STEP) in its submissions to the UK Treasury Select Committee.
The Clarification of a Catch 22 Situation for Financial Institutions
In Gichuru v Walbrook Trustees (Jersey) Limited and Ors [2008] JRC 068, the Court provided useful guidance for the Catch 22 situation that arises when JFCU consent is refused following an SAR but no criminal proceedings are initiated. How should a responsible financial institution, who maintain an informal ’freeze’ on client monies in the absence of consent, respond to a legal action by the client for payment of those funds?
US Sanctions Breaches: Non-US Businesses and Reputational Risk
This article addresses the effect of US sanctions on foreign domiciled companies and other businesses. More specifically, it deals with the exposure of foreign domiciled companies to reputational risk arising out of breaches of the US sanctions regime.
The Export of US Compliance Obligations
September 11 was a seismic event. The effects are now being felt by UK banks caught in the aftershock of US foreign policy as they come under pressure from the United States to comply with its sanctions regime.
Money Laundering (Jersey) Order 2008This Briefing Paper aims to provide an overview of key changes to Jersey’s AML regime arising as a result of the Money Laundering (Jersey) Order 2008 ("the 2008 Order").
Loss of a Privilege
Until now the rudest question that a Jersey lawyer has had to ask a client is ’can you pay my fees". Not for much longer. Lawyers in Jersey are about to get a taste of the medicine that their financial services clients have been swallowing since the introduction of the anti money laundering regime in Jersey since 1999.
Must the Overseas Branches of Jersey Financial Services Businesses comply with the provisions of new JFSC Handbook?
In relation to regulatory requirements imposed on overseas branches of Jersey bodies corporate and / or Jersey limited liability partnerships, there is an apparent difference between the requirements set out in the draft Money Laundering (Jersey) Order 200- (’the draft Order’) and the draft Handbook for the Prevention and Detection of Money Laundering and the Financing of Terrorism (’the Handbook’). The Handbook appears to provide a broader concession for overseas branches of Jersey businesses to follow the relevant overseas regulatory requirements and guidance although there are confusingly two potential credible interpretations of the concession.
Minwalla - Proceeds of Crime Law
The consent provisions of the Proceeds of Crime (Jersey) Law 1999 have been criticised by the finance industry and legal profession in Jersey. This is largely because of the uncomfortable position which the legislation sometimes puts financial services providers and others in when they have suspicions about the origin of funds they hold and where the States of Jersey Police shares that suspicion.
Civil Search Orders: The end of privilege against self-incrimination?
In C PLC v P & Attorney General (Intervenor) [2007] EWCA Civ 493 the Court of Appeal decided that the privilege against self-incrimination cannot be relied on to hold back incriminating material found in the course of the execution of a civil search order (also known as an Anton Piller order).
Mere Suspicion - Breaking Down the Banker’s Door
In a competitive international banking environment where clients value confidentiality and there are jurisdictions vying to give it to them, an incursion into the privacy offered by Jersey banks ought to be of concern to the island’s business and legal community.
Da Silva - Defining Suspicion and the Need for Reasonableness
This case is noteworthy in that it represents the furthest extent to which the Court has gone in numerous attempts to define the state of mind required for ’suspicion’; a word in common usage throughout both UK and Jersey money laundering legislation.
The Space between Rational and Reasonable - A Threat to Financial Professionals
As long as financial institutions fail to recognise the distinction between what is right and what they can rationalise as reasonable, the risk of criminal prosecution will remain.
Terrorist Financing Update - Recent Arrests in Europe
The series of arrests made last year on various terrorist cells highlights the issues around terrorist financing.
When is Suspicion Reasonable?
N2J and Ace Telecom Trading Ltd -v- Cater Allen, (Unreported, 21 February 2006) is another recent English High Court judgment in relation to Part 7 of the UK PICA 2002 which considers the reasonableness or otherwise of a suspicion for the purposes of the Act.This case highlights, yet again, the vital importance of having, and applying, a KYC policy.
Treatment of the Proceeds of Bribes
Daraydan Holdings & Ors v Solland International Limited & Ors 2004
A Potential Beneficiaries Right to Trust Information
Schmidt v Rosewood Trust Ltd (2003 - Privy Council) A case that has ramifications for trustees who will need to tread carefully in this area.
Understanding Money Laundering
The ’smoke and mirrors’ world of money laundering explored.
Mad for It
The proposed changes to the Jersey insider dealing and misleading statements legislation is in draft form. The forthcoming European Commission directive on insider dealing and market manipulation (the Market Abuse Directive: ’MAD’) is driving these changes.
R v Montila and Others (House of Lords) (2004)
Is there a requirement to prove property derived from crime to prosecute an offence of money laundering?